Microsoft has an okay quarter, posts $4.3B profit

It's quarterly report time, and we doubt the boys in Redmond mind taking a little shine off Apple's big day with their first quarter results -- especially since Microsoft posted profits of $4.3B on revenues of $13.7B, an increase of 23 percent over last year. The company attributed the great quarter not only to a 90-percent spike in Xbox 360 demand due to what the what analysts are amusingly calling the "Halo effect," but also to strong performance by both Vista and Office -- Microsoft says demand for Vista is "encouraging," especially in markets like Brazil, India, and China. There wasn't much mention of the company's recent investment in Facebook or how Bill and the boys plan on reversing the online division's loss of $264M, but when you're playing around with four billion in profits, we suppose you can ignore pocket change like that.

[Thanks to everyone who sent this in]

[geezer @ Oct 26th 2007 12:52PM]

Microsoft three-phase business plan:
1. Collect Underpants
2. ?
3. Profit

[Hollywood Ron @ Oct 26th 2007 12:55PM]

Step 2 must be something amazing, because Step 3 is gigantic.

[daaper @ Oct 26th 2007 12:57PM]

I'm sure someone there knows step two...ask the gnomes, perhaps?

[paloooz @ Oct 26th 2007 12:58PM]

Hey, that's almost the same as mine:

1. Remove underpants
2. ???
3. Profit!

[Magallanes @ Oct 26th 2007 2:31PM]

1. Microsoft Underpants with Service Pack 1.
2. ???
3. Profit!

[unsigned @ Oct 26th 2007 3:39PM]

@paloooz: No you don't, I have prior art on that. Neener.

[FrankTheCrank @ Oct 26th 2007 4:11PM]

I'm gonna puke!

And the shafting of America continues.

Go to hell Microsoft.

[ZenUltimate @ Oct 26th 2007 11:38PM]

Demand for vista :D

http://zenultimate.notlong.com

[Phil @ Oct 27th 2007 5:02AM]

I certainly don'y understand the 'demand is encouraging' bit.....

Every new PC or Laptop comes pre-loaded with Vista!!!!!

The consumer does'nt have a choice.......or maybe they do, but ar'nt being told........hmmmmm

4 billion NET profit on 13 billion turnover is staggering. How's about spreading the wealth gentlemen?

[rv @ Oct 26th 2007 12:53PM]

Now will they sustain profits instead of losses in the entertainment division after halo?

Its good that they did turn a profit there. I was beginning to think that they may never turn a profit and then abandon the xbox.

[Matthew Hilario @ Oct 26th 2007 12:56PM]

xbox saved vista.

[getz76 @ Oct 26th 2007 1:36PM]

Love it or hate it, it sold 88 million copies, Matty.

Not too shabby.

[blahh @ Oct 26th 2007 1:50PM]

forced 88M copies on people

[roach @ Oct 26th 2007 1:51PM]

iPod saved Apple

[Ruben @ Oct 26th 2007 2:33PM]

@blahh

Last time i checked, consumers had a choice, as well as the vendors.

If HP, Acer, and all those other low-cost PC manufacturers felt that Vista was the disaster that the internet seems to make it out to be, then they wouldnt use it, and stick to XP.

If Vista is such a bad choice, and is "forced" on all of us, then why isnt the alternative doing nearly as well?

[MauMan @ Oct 26th 2007 2:54PM]

(back to the original commenter's thread)

Not yet. If you subtract the "$300 million bounce" due to halo 3 they lost $135m this quarter which is comparable to the $142m loss the same quarter last year. They're losing less but they're still bleeding money in the Entertainment and Devices BU. To date that BU has lost $7 billion (income - expenses) since the XBox came out and that does not count fiscal year 2001 which incurred expenses due to the XBox development.

However, I would not worry about Microsoft ditching the XBox anytime soon. Clearly if loosing bags of money was a deterrent to Microsoft they would have bailed on this thing a long time ago.

[jon.leopold @ Oct 26th 2007 1:02PM]

Yeah, I'm a Mac fan, but I'm still getting an Xbox 360 tomorrow now that I have the cash. Put me down for helping MS in Q4...

[David W. @ Oct 26th 2007 2:13PM]

check out Orange Box if you like shooters...better then Halo in my opinion! But Halo is an awesome game as well!

[rv @ Oct 26th 2007 4:14PM]

be sure to get live

[jere @ Oct 26th 2007 11:25PM]

Bioshock.

[myles @ Oct 26th 2007 1:05PM]

apple would get some extra profit from me if they would release that damn 13" mac book pro or w/e it is suppost to be. I been waiting for ever =(...

[Brandon @ Oct 26th 2007 1:17PM]

When I read the title in my fead-reeder, I could've sworn it said "Microsoft has an okay quarter, posts $4.38 profit". I thought to myself, "Wow, the Xbox must REALLY be losing them money!"

[stankychicken @ Oct 26th 2007 1:24PM]

I love how engadget says "Microsoft posts okay quarter" if anyone keeps up with the stock market or business in general every other website is thanking and giving microsoft tons of praise for pulling the market out of the slump it was in until this morning. engadget needs to take apple's rod out of their ass and quit hating on everything that doesn't have to do with the iphone, mac, osx, steve jobs and everything else. every leading financial website is completely blown away by microsofts preformance and says that it is awesome. but iNgadget only says.......okay. sorry for my rant but engadget needs to do something about the apple love.

[stitifier @ Oct 26th 2007 1:26PM]

I think the title of the post was meant to be tongue-in-cheek.

[Adam @ Oct 26th 2007 1:29PM]

lol yea chill, i think it was a joke

[Greenline @ Oct 26th 2007 1:42PM]

You sir are a moron. I love Apple and I noticed the sarcasim. Maybe if there were more intelligent readers like you then Engadget would be able to take the Apple rod out of their ass, but since there aren't then we will have to stick to Apple stuff to please the morons . . . again that was sarcasm, for you to practice.

[Hax Or @ Oct 26th 2007 2:04PM]

stankychicken is what we call a 'troll'.

How about make your own gadget blog and post your own articles?

Such a fresh noob! :) I love it.

[jalabi @ Nov 9th 2007 4:15PM]

"Microsoft pulled the stock market out a slump"? What have you been smoking, dude? One company cannot pull the entire NASDAQ out of a slump. And come to think of it, who said that there IS a slump?

That said, obviously, the title of this blog post was meant in a tongue-in-cheek way (I would LOVE to have as OK a quarter as MSFT did!) so chill already, and stop thinking that if a person supports AAPL they must of necessity hate MSFT, and vice versa.

[ReknapS @ Oct 26th 2007 4:16PM]

Stankychicken...
You sir, are the reason everybody has to put /sarcasm at the end of their posts...
Thanks a lot

[John @ Oct 26th 2007 4:48PM]

please, the only thing that distinguishes microsoft fanboys and apple fanboys is that us MS fanboys tend to be quiet and discreet about our sordid love affair. For the love of god, don't make us just as obnoxious as the extremists of the other side.

[Peter @ Oct 26th 2007 10:12PM]

I completely agree. Whoever wrote this headline is not in touch with any reality since the stock has now hit a six year high. Maybe the writer has too! What would it take to for Microsoft to have a "good" quarter. Make you the president?

[Marc Mitchell @ Oct 26th 2007 1:24PM]

the very moment leopard gets released & you want to talk about microsoft, todays a great day, but not for microsoft.. its over, finished .. see ya.. & good frakin riddance you bunch of unoriginal %$^&*.. Kiss my shinny apple ass :) hahahah

MM

PS, "brown zune" still makes me laugh.. but vista, man thats getting funnier every day hahahahahahahahahahahahah

[michael @ Oct 26th 2007 1:47PM]

If all you can manage is hateful an fanoish remarks. I think it will do the world a lot of good for you to retire into your mum's basement and cancel you internet subscription.

[rockintom @ Oct 26th 2007 1:52PM]

Vista is getting funnier every day... because it is selling so well?

[Jeff @ Oct 26th 2007 2:01PM]

There aren't even 88 million mac users on the planet, and Vista has only been out less than one year.

Vista has pwoned all the Apple flunkies as expected.

[Hax Or @ Oct 26th 2007 2:08PM]

I know Vista is worse than Windows ME.

I'll run XP until the next operating system AFTER Vista. Vista was/is a fiasco.

Unlike Leopard, there are no features that you gain by upgrading from XP to Vista. Aero Glass is just a theme, and all of the security changes were already made in XP SP2.

Don't bother arguing specifics. I'm talking in general...

[David W. @ Oct 26th 2007 2:41PM]

@ Marc...you're dumb

@ Hax Or...have your heard some of the rumors? The next Windows OS is supposed to be a clean cut...none of the programs will work with the new version of windows...they're redoing the core and everything...it's an exciting idea...I think they could make a great OS without those constraints...but at the same time...none of my software would work...

[Chir @ Oct 26th 2007 1:25PM]

The bias on this blog is getting ridiculous. "Okay quarter"? Patent nonsense. Microsoft just had a great quarter. Earnings during the quarter soundly beat all Wall Street analyst expectations. Stock rose over 10% in aftermarket trading immediately following the release of this great news. This is one of the best news to come out of Wall Street in weeks. All market indices are performing better because of the after effect of the Microsoft announcement. And you dare say "okay quarter"? Operating losses in the online division? You failed to mention at all how that division posted over $100 million more revenue compared to last year. The loss can be attributed to more operation costs, but since their revenue is increasing, they are doing just fine.

[Mr. B @ Oct 26th 2007 1:56PM]

Check the batteries in your sarcasm detector.

[opus @ Oct 26th 2007 1:26PM]

And how can Vista sales be "encouraging" in China? I just returned from Hong Kong and "easy install" (no serial number needed) versions of Vista were on the streets for about $30 everywhere. The pirates may have turned a few $B there but not MS.

[deedeedee @ Oct 26th 2007 1:58PM]

corporate and government sells dude, I bet those makes up most of the revenue of OS sales in China for MS. and everybody else in china buy the pirated one which i've never seen one that's $30 USD when I was there, more like $2 bucks! and pirated PS2 games and dvds are about $2 as well.

Yea, it's THAAAT awesome!

[Lauren the Ghoti @ Oct 26th 2007 1:41PM]

Makes Engadget's favorite company...i.e Apple's profits look like a fart in the wind doesn't it. Outisde this online bubble where all things is iFantastic...the real world still runs on the shoulders of Redmond and Apple is irrelevant.

[GregA @ Oct 26th 2007 2:20PM]

Glad to see you have finally come around to my way of thinking;)

[John @ Oct 26th 2007 5:00PM]

god damn it, you're being just as obnoxious as the apple trolls. Neither company is "irrelevant"

[Antimatter @ Oct 26th 2007 1:33PM]

Laugh.

"Microsoft shares hit 6-year high on earnings report" - MarketWatch
"Stocks Rally on Microsoft, Countrywide" - AP
"Microsoft Sends Tech Soaring" - TheStreet.com

"Microsoft has an okay quarter" - Engadget

[David W. @ Oct 26th 2007 2:18PM]

hahahahaha I mean it was obviously a joke...but hahahaha that's awesome

[bsm0f0 @ Oct 26th 2007 3:58PM]

that was awesome!

[Jack Storm @ Oct 26th 2007 1:38PM]

I wish i would have an 'Okay' quarter then

lol engadget forgot the sarcasm tag?? baaaaaaad and LATE my engadget buddies

[belial20xx @ Oct 26th 2007 1:43PM]

Dont DO it!!! SAVE YOUR MONEY> SAVE YOU FRUSTRATION FOR SOMETHIN ELSE. The 360 is a pos and is the most horrid peice of engineerimg I have ever seen. The thing breaks if you look at it wrong. I have been through 3 already and I treated really well and had in an refridgerated air conditioned room and it still croaked and for another I boutgh the disc tray stopped working so it would not read discs.

I would advise to put the cash into a pc or a ps3, wii or wait till they are reliable if that day ever comes.

The sad thing is that when yoours breaks you are forced into a never ending repair process. Since july I have had to send the refurbs back 2 times because of the same issue as the others.

The games may be great but it is not worth it at all. As much as I paid for the actual time played it is really not worth the several hundred dollar investment considering most 360s break with in the first year.

As a not I have been in the repair process since september 06 and I just sent the pos in again on the 9th of october.


SAVE YOUR MONEY FOR SOMTHING THAT WILL WORK FOR YEARS NOT MONTHS,

[Jack Storm @ Oct 26th 2007 1:48PM]

ive had my 360 for over a year no problems WHAT A FARKIN POS nah not really. i had my wii for 10 months its been 7 months since ive used it, my lil cousin uses it once in a while so it doesnt collect dust. PS3 hmm for what? maybe later