Investors Shrug as Microsoft Makes a Ton of Money

[k0de]

Microsoft?s revenue rose 18 percent to $23.4 billion from $19.9 billion reported in the same period last year.

I love it.

Who said MSFT is dead! Lol

Your thoughts?

Source: Investors Shrug as Microsoft Makes a Ton of Money - Businessweek

 

[anon(7900571)]

MSFT is dead no they are rising , way to go MSFT

 

[smoledman]

EBITA down year on year, yet after hours stock is up. Go figure. Maybe investors believe Nadella is going to continue his hack & slash to non-performing divisions and products.

 

[Jas00555]

I wouldn't say that they've shrugged it off. Their stock price is higher than its been in a very long time. I think investors are excited since they laid out a way for Microsoft Mobile (the reason their profits were down YoY) to have a path toward profitability and even laid out the surprising fact that they expect Bing (one of their "consumer" products that everyone says they need to abandon) will finally be profitable soon.

 

[smoledman]

The way I see it Nadella wants to eliminate everything non-core. That means eliminate the phone division, MS Stores and other peripheral stuff costing them money. XBox might remain an exception if it can at least remain break-even. MS can't sell XBox because the entanglement of the OS with Windows is too deep. Nobody would buy that. However I do see them stopping the massive payments for exclusive games and content(NFL). Nadella will tell Phil Spencer - "XBox has to sink or swim on it's own from now on, no subsidy payments".

 

[Laura Knotek]

The way I see it Nadella wants to eliminate everything non-core. That means eliminate the phone division, MS Stores and other peripheral stuff costing them money. XBox might remain an exception if it can at least remain break-even. MS can't sell XBox because the entanglement of the OS with Windows is too deep. Nobody would buy that. However I do see them stopping the massive payments for exclusive games and content(NFL). Nadella will tell Phil Spencer - "XBox has to sink or swim on it's own from now on, no subsidy payments".

I really do not see how Microsoft could eliminate the phone division if it wishes to remain in business in the future. Beside, "mobile first and cloud first" would not make sense otherwise.

 

[Penny_1]

Nadella definitely seems to be narrowing Microsoft's focus, but I don't think the purpose is to eliminate all that is peripheral. I think Nadella is simply trying to present a more unified vision within Microsoft. Lack of focus is a big killer in business of time and capital, so I like his emphasis on focus. I hope rather than getting rid of peripheral divisions of Microsoft, he is able to focus them all to fulfill their role in Microsoft's vision.

Speaking of which, it seems that vision is all about cloud and core. The unified core OS that powers all things Microsoft, and the cloud that unifies all information. I look to see Microsoft attempting to lead the industry in these two areas, and success in the Mobile Phone industry may be made possible as a result, but not before.

 

[Great deal]

Turnover is irrelevant, its all about profit. With the Nokia purchase eating into profits the market react accordingly, no surprise really, next year will be different though.

 

[k0de]

Turnover is irrelevant, its all about profit. With the Nokia purchase eating into profits the market react accordingly, no surprise really, next year will be different though.

I hope that the Nokia ROI will double by next year.

 

[smoledman]

I hope that the Nokia ROI will double by next year.

​By this time next year the Nokia division will be either sold off or shuttered.

 

[Jas00555]

​By this time next year the Nokia division will be either sold off or shuttered.

So after laying out a plan to get the ex-Nokia division to profitability, they should shut it down 14 months after acquiring it??? I mean, if you say so, you're the professional businessman here. I can't argue with that kind of logic.

 

[smoledman]

So after laying out a plan to get the ex-Nokia division to profitability, they should shut it down 14 months after acquiring it??? I mean, if you say so, you're the professional businessman here. I can't argue with that kind of logic.

Nokia division just lost $600 million, I see no recipe to profitability any time soon if ever. Many investor groups have called for Microsoft to divest itself of all hardware completely and focus on the core(WIndows, Office, Azure, Server, Tools).

 

[Jas00555]

Nokia division just lost $600 million, I see no recipe to profitability any time soon if ever. Many investor groups have called for Microsoft to divest itself of all hardware completely and focus on the core(WIndows, Office, Azure, Server, Tools).

Right, they only cut half of the jobs in the division and have only been selling more phones YoY (since I know your post history, I know that you'll try to go "oh, they only sold 6 million. That's less YoY." But if you adjust the figures, they sold slightly more than last year, which is impressive considering the last worldwide phone was the 1520 since the 630 and 930 just recently went on sale.).

Investors have also called for the killing off of Bing as recently as earlier this year, but that'll be profitable in 1.5-2 years (according to MS), so you can't really point to "investors are strongly for this, so its what it'll do". Obviously investors control a lot of it, but if Microsoft can take the steps to at least breaking even, investors won't bother them about it.

Edit: I found the quote about Microsoft Mobile breaking even

Amy Hood: We will be on a path to reach operating break even by FY16

 

[k0de]

​By this time next year the Nokia division will be either sold off or shuttered.

Not necessarily. Next year will an interesting year to watch and see what happens to Nokia products that MSFT has pick up. Satya is on tear. Thumbs up. Performance first or get cut off. Satya era begins now.

Next year will be interesting.

 

[Svoboda]

The way I see it Nadella wants to eliminate everything non-core. That means eliminate the phone division, MS Stores and other peripheral stuff costing them money. XBox might remain an exception if it can at least remain break-even. MS can't sell XBox because the entanglement of the OS with Windows is too deep. Nobody would buy that. However I do see them stopping the massive payments for exclusive games and content(NFL). Nadella will tell Phil Spencer - "XBox has to sink or swim on it's own from now on, no subsidy payments".

Not sure if serious?

 

[smoledman]

Not sure if serious?

Deadly serious. Nadella is very hell-bent on trimming down the company.

 

[Great deal]

Deadly serious. Nadella is very hell-bent on trimming down the company.

no comment...