Microsoft FY 4Q13 Earnings Call Notes

posted in: Notes | 0

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. The quotes are generally pieces of information that I find interesting or helpful to understanding the company, industry or economy and are not meant to provide summaries of the full content of the call. Other posts in this series can be found by clicking here. Full transcripts can be found at Seeking Alpha.

“The consumer x86 PC market declined as users continued to prioritize devices to touch and ability. At the same time we saw continued strength in our enterprise product and cloud solution and increased adoption of our consumer services.”

“our Windows business declined as the device market continued to evolve beyond the traditional PC. We are working to transition the business into this modern era of computing taking advantage of the new scenarios enabled our Windows 8.”

“We reduced the price of Surface RT by $150 to $349 per device. As a result of this price change as well as inventory adjustments for related parts and accessories we recorded a $900 million charge to our income statement.”

“I want to be very clear, we know we have to do better and that’s one reason we made a strategic and organizational changes we made last week. With over 1.5 billion Windows users around the world, a transition of this magnitude takes time. We are confident we are moving in the right direction.”

“We estimate consumer PCs declined more than 20%. As a result, OEM revenue declined 15%.”

“Server and Tools business which posted another solid quarter with 9% revenue growth and double-digit bookings growth.”

“Now I’ll move on to the Microsoft Business Division where revenue grew 2%. Within that, business revenue grew 7%, driven by 10% growth in annuity revenue. Consumer revenue declined 27%.”

“In the Entertainment and Devices division, revenue grew 8%. Xbox LIVE transaction revenue grew nearly 20% and is providing economic opportunities for publishers in the soft console market”

[analyst question] “Are you sensing that OEMs are trying to manage inventories down for the time being and waiting cautiously Intel suggested that maybe you’re seeing some inventory liquidation.” [Microsoft answer] “we are excited about the advances Intel has made with the fourth-generation core processor. And we’re also looking forward to the next ADAM chip but was launched a little less than a month ago. I think it’s little bit too early for me to say and like to wait and see how the quarter plays out.”