Microsoft Earnings: Signs in the Cloud of Money

Here's the MSFT quarterly report.

Apparently, they're touting Home and Entertainment (Halo 2) sectors as big wins for them, despite the fact that both of these segments are still money-losers in the big picture.

1) That's one interesting take-away -- we're pointing to segments where we're still losing, as evidence of our continued viability. "While Home and Entertainment was profitable in the 2nd fiscal quarter, it will lose money for the remainder of the year, CFO Connors said. The goal for the group is to reach sustained profitability sometime in FY 2007." See News for details.

2) Secondly, as the Chicago Tribune accurately points out, Microsoft net doubled, but the company's sales growth has significantly slowed.

Final Takeaway? MS is healthy, and is beating forecasts. But they've got some stormy waters ahead, and they know it. This may be the spike before the nose-dive.