Microsoft likely to report lower quarterly profit than Apple for first time since 1990

“This week, with its stock trading slightly lower than a year ago, [Microsoft], the world’s largest software company, is set to report lower profit as PC sales growth fizzles, and it struggles to convince investors that it can grab a foothold in the fast-moving mobile and tablet markets,” Bill Rigby reports for Reuters.

MacDailyNews Take: You know, a lot of people call Microsoft “the world’s largest software company.” Knowing that Apple makes software, too, we have to ask, “Based on what criteria is Microsoft is the world’s largest software company?” It certainly isn’t the market value of the company. Or revenue. Or, soon, profits. Is it in company employees? Bloated Microsoft wins that measure. Is it unit sales of Windows, Office and other software licenses or something else? Even Microsoft doesn’t claim it – their press release boilerplate states, rather laughably, “Microsoft is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.”

Rigby continues, “Most investors expect a solid quarter for the company, but are more focused on fears that Microsoft’s new Windows phone software isn’t selling well. And while approving of a recent decision to make a version of Windows for ARM chips, the market realizes that means there won’t be a Windows-based challenger to Apple Inc’s iPad for at least two years… PC sales, the surest guide to Microsoft’s overall health, rose only 3.1 percent in the last three months of last year, according to research firm Gartner.”

MacDailyNews Take: That 3.1% included Apple’s Mac sales which are outgrowing the PC market and have been doing so for 19 straight quarters.

Rigby continues, “Microsoft is expected to report profit of 68 cents per share, according to Thomson Reuters I/B/E/S, lower than the 74 cents it reported a year ago… One uncomfortable fact for Microsoft: unless it posts blowout numbers, it will have lower quarterly profit than Apple for the first time in recent memory. The last time Apple produced more profit in a year than Microsoft was 1990. Last week, Apple announced a record $6 billion quarterly profit on strong-selling iPhones and iPads over the holiday shopping season. Analysts expect Microsoft to post profit of $5.93 billion for the same quarter.”

MacDailyNews Note: “Analysts project that the software giant will show a 7 percent drop in earnings to 69 cents a share and only a 1 percent rise in revenue to $19.2 billion,” The Silicon Valley / San Jose Business Journal reports. For the quarter ended December 25, 2010, Apple posted record revenue of $26.74 billion and record net quarterly profit of $6.0 billion, or $6.43 per diluted share.

Rigby continues, “If the company does not impress Wall Street this quarter, or show it has a realistic plan for growth, questions will be asked about the leadership of Steve Ballmer, now in his 12th year as chief executive. “A string of high-level departures has raised concerns about his efforts to revitalize the company. Ballmer ‘is always on thin ice,’ said Kim Caughey Forrest, senior analyst at Fort Pitt Capital. “Microsoft is a results-driven company.'”

Full article here.

MacDailyNews Take: Microsoft board members and shareholders please maintain catatonia. Leave Balmy alone. We like his “strategy.” We like it a lot!

[Thanks to MacDailyNews Reader “Lynn W.” for the heads up.]


  1. Microsoft CEO Steve Ballmer laughs at Apple iPhone on January 17, 2007

    Interviewer: “Steve let me ask you about the iPhone, and the Zune, if I may. (Ballmer smiles) The Zune was getting some traction, and Steve Jobs goes to MacWorld and he pulls out this iPhone. What was your first reaction when you saw that?”

    Laughter from Ballmer

    Ballmer: “$500! Fully subsidized! With a plan! I said that is the most expensive phone in the world. And it doesn’t appeal to business customers because it doesn’t have a keyboard which makes it not a very good email machine.”

    It never gets old. Enjoy your crow pie, Mr. Ballmer.

  2. “Microsoft is a results-driven company.'”

    If by “results” one means how many ideas it has stolen, how many companies it has squashed, or how much money it could squeeze from its near monopoly position, yeah it’s long been “results-driven”. But that strategy has run its course. Others no longer fear Microsoft, nor do they automatically fall in line behind its strategy du jour. And they no longer accept Microsoft’s “vapor” in the face of real competitive products.

  3. Please, please.. leave Steve Ballmer as a CEO… I really like his work ” width=”19″ height=”19″ alt=”smile” style=”border:0;” />
    Thanks to him we have more macs in our environment and more iphones.

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