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GVA Reseach’s David Garrity, Zacks.com Senior Equities Strategist Jared Levy and FBN’s Shibani Joshi break down Microsoft’s fourth-quarter earni...
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You know back to -- to -- your body Joshi having this is one of those quarters where you just have to it's it's hard to really take too much in.
Because of this right doubt it's a huge six point two billion dollar write down.
-- -- -- -- -- -- -- -- -- Investors were little they concerned about servers and tools that business is up 13% in the fourth quarter.
It's business division is up 7%.
Windows Phone unit -- actually give the number of handset sales but that was up 60% quarter over quarter.
And it's being -- market share you know -- trying to compete with Google and Yahoo!.
Is up now at fifteen point 6% that is up one point 2% to what you're seeing is a story.
Incremental growth not huge growth but we were expecting a little -- a pullback particularly vulnerability in the business.
Corporate spending units and we're not seeing that I think that's what's -- causing the stock to leave -- Now David Garrity you know you've said that this is a quarter where in essence you could look at it I look this is road -- why.
Well from the standpoint that you've gotten the second half of the year specifically in September of 2012 introduction of office eight.
Windows say thank -- they're saying October according to these headlines but possibly October the second half of 2012.
We are looking in a situation where with.
Window's -- and then office fifteen coming in early 2013.
It -- customers might have decided given weaker economy is a -- in their heels and wait for the new products to come out but to the extent that we see fairly decent volume specifically Microsoft.
Business division up 7% year every year you could say the June quarter wasn't necessarily throw it into the extent about the road kill other view -- a Quant it was a business have been bought back in 2007 we know the company been losing money hand over fist.
In their online services division -- almost 500 million dollars a quarter if you look back over last -- so from that standpoint writing off the business was almost a foregone conclusion.
The bigger thing here obviously investors have been looking forward to is -- product cycle it's coming up in the second half of 2000.
While away the initial stock reaction had been to go down after hours now it is up about the last trade.
Certainly positive indication and we would argue that over the second half of the year with the ramp up coming from Microsoft from their core business area in terms of the Microsoft Business Division.
Given the fact that enterprise PCs still 50% of them operate windows XP.
There's just a huge upgrade opportunity for Microsoft here over the next six to twelve months and obviously as earnings in the -- and revenues and then their earnings move up obviously a stock's gonna move higher.
You know Jerry today it's interesting that Microsoft cooler coming out saying -- -- -- of course is all about the search engine.
Microsoft likes to think of themselves as being in that business as well but there.
Are they making any progress there at all it seems that their core business is really what's driving it they're.
There der -- goal of getting into the search business they're not achieve.
-- for now it's it's focused on their enterprise business I would say involved we've got a free look from -- the other day when a key issue that's drug sales again attributing it to some of the windows.
Influence there I think that this is yet to grow that sort of -- indicate for now.
-- the look from traders is really focus on the enterprise business.
That search will come out of the icing on the Internet stop driving your business like the way that's not what we -- -- wanna go back to David for second on who will forgive me for switching back to -- -- but there's a lot of question about Larry Page.
He didn't speak they said he was having some throat problems -- at the last conference does that concern you at all -- or any concern at all about the top level of managed.
And fare well certainly anytime -- have a company were the lead management and specifically the founders of one of the two founders of the company.
Is is suffering some health issues certainly there's a great concern -- look at the example we haven't Steve Jobs -- apple.
But I would argue that you know what Larry Page may have in terms of aggravated laryngitis.
Is not pancreatic cancer as we have in the case of Steve Jobs so.
We hope obviously Larry Page best of health and rapid recovery but it's not keeping -- of the office.
Nobody's bringing up with a sort of that well that the blonde what in the hope that that would be Marisa Mayer who left.
This is a company that has continued over the past what 48 hours the stock -- moved higher while Yahoo! -- she's leaving of course to go run Yahoo!.
Is that a negative -- all that you see for Google.
Certainly looking tool you have -- -- -- certainly very very important employees somebody had been there employee number twenty clearly had been instrumental in helping to build the company.
But to the extent than Google now has evolved you can look at the bench strength that they have.
Google obviously is a logical place in Silicon Valley for other competitors to come out.
And try to rate for talent and obviously Yahoo! in that case was no exception they just a page right out of that book certainly -- which is -- very very well at Yahoo! but there's going to be a great deal of rose to -- and Yahoo! and then obviously what's the other turnaround goes the -- more than twelve to eighteen.
