Earnings Report Update 04/27/07

The Nattering One unmasked Apple's sequential disaster earlier this week, now we defrock Microsofts blowout report...

Microsoft (MSFT) reported Yoy Q3 profit +65% on revenue +32%, spurred by Vista sales.

Small detail... Microsoft offered coupons in a Vista & Office upgrade promo last year, and delayed booking the profit and sales until the coupons were submitted.

Sniff, Sniff... $1.67 B in revenue & $1.14 B in profit was deferred from Q1 & Q2 to Q3. Excluding the deferred revenue Q3 Yoy revenue +17%, not bad, but...

A sequential review, Q2 Revenue $12.5B vs Q3 Revenue $14.4B; backing out the forward channel stuffing revenue of $1.67 B nets $12.73 B or a 1.8% sequential increase...

We just went from +32% to +17% to +1.8%... nice spin eh? Other horrors... Xbox division revenue was down 25% Yoy; are you sitting down? -69% vs Q2.

A peak at the EDGAR filings reveals other channel stuffing horrors that Microsoft is engaging in...

Including the disparity in PC shipments vs Windows licenses which hints at a larger volume of Vista licenses going into the channel than coming out.

This situation suggests PC manufacturers and retailers may be sitting on quite a bit of stock, if OEM license purchases did exceed actual PC sales.

Forward guidance was also disappointingly flat.

Chipster Broadcom (BRCM) unlike TI with a shread of honesty...

saying it may not see a resumption of revenue growth until the second half of 2007 had the Semis finally selling off.

Chevron (XOM) Q1 Profit Yoy +18%; earnings +21% on declining revenue -12% and sales -14.8%.

US upstream Yoy -34%; US downstream sales volume -6%
; US downstream profit +66%.

CEO Dave O'Reilly: "
a decline in upstream profits from a year ago due to lower prices for crude oil and natural gas.

In our downstream business, earnings benefited from the sale of refining assets in Europe and higher margins for refined products worldwide
."

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