InformationWeek: Microsoft altered Windows sales numbers

“Microsoft’s most recent Windows sales totals got a boost from the fact the company quietly added revenues previously assigned to other groups to its operating systems unit, a bit of accounting legerdemain that, along with other bookkeeping moves, helped the Windows group post big gains in the past quarter, according to an InformationWeek analysis of the software maker’s SEC filings,” Paul McDougall reports for InformationWeek.

MacDailyNews Take: Ballmer.

McDougall reports, “Microsoft’s latest quarterly report shows the company bolstered revenues in its Windows, Server & Tools, and Office units in part by shifting money from other internal organizations–mostly the Entertainment and Devices Division, which sells the Xbox.”

MacDailyNews Take: Ballmer T. Clown.

McDougall reports, “Windows group sales alone may have benefited by as much as $259 million or more, just from the bookkeeping changes. Indeed, the Windows group, which includes the flagship Windows 7 OS, was the main beneficiary of the revisions, while the EDD unit was the biggest loser.”

Read more in the full article, including how Microsoft’s Big Ass Table has vanished from Microsoft’s quarterly earnings statement altogether, here.

MacDailyNews Take: May he remain Microsoft CEO for as long as it takes!

[Thanks to MacDailyNews Reader “Dan K.” for the heads up.]

24 Comments

  1. One day big ass will conquer the penny arcade market. When that happens, I’ll be first in line to play pinball on the awesome Microsoft B. A. T. (design inspired by ballmer T.’s arse)

  2. Microsoft could borrow from EDD because it was already a loser. The gains added to their high profile Windows unit more than made up for any negatives associated with EDD because no one expects much from that unit.

    Financial shenanigans accompany corporate desperation and mark the start of the big decline.

  3. Hey, learned ladies and gentlemen . . .

    Is this, or is it NOT, a violation of SEC accounting rules? As an investor, I would want to know Win7’s actual numbers before investing in MSFT at any level. These manipulations seem illegal, if not highly unethical, to this simple mind.

    What say you, folks?

  4. @silverhawk

    That’s exactly what I was thinking when I read the article. I wouldn’t like to be the perineal goat so Ballmer can look more like a winner. How embarrassing is that, not to mention a career killer.

  5. … and next quarter those roving numbers can flow into the W7 phone division to prove that W7 phone is outselling iPhone, Android and Nokia combined!

    Don’t knock Ballmer, he’s a magician!

  6. Not Bill writes “This time he juggled and sold $2B in stock. Hmm.”

    And that proves just how selfless our beloved Ballmer is – it wasn’t for his own gain, he was spotted at several Walmarts buying truckloads of Kinects and Windows 7 phones. Next quarter is going to smash all sales forecasts…

  7. I agree that Microsoft has been pulling a Dell and fiddling with their numbers. One, we know they’ve pulled channel stuffing stunts in the past, in order to meet financial targets. Two, the slush fund isn’t the EDD, because mgmt compensation is often tied to performance. While the head of the Windows Division probably likes having his income boosted, the head of the Xbox division, EDD, probably hates it. Three, I have written before that I believe the slush fund is actually in “Corporate-level activity” or “Reconciling amounts”. Microsoft, unlike other companies has an income center, that only loses money, called “Corporate-level activity” or “Reconciling amounts”. They lost $1B last quarter. It’s utter nonsense. Every company allocates all costs to some income center, except for Microsoft. It’s utterly ridiculous that Microsoft can hide losses in a catch-all category, which could hide actual problems in one of their real income divisions.

    This is how Microsoft defines, CLA:
    “Certain other corporate-level activity is not allocated to our segments, including costs of: broad-based sales and marketing; product support services; human resources; legal; finance; information technology; corporate development and procurement activities; research and development; legal settlements and contingencies; and employee severance.”

    How can they not know where to allocate the costs of human resources? Utter rubbish.

  8. Ms has been playing a shell game with its quarterly revs/earnings for years, accruing licensing numbers almost as they please, and on at least one occasion restating a past (upbeat) quarter downward and moving the dollars to a future quarter. It’s technically legal.

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