Microsoft: a Year of Record Earnings And All it Gets is 6% Stock Bump

From DailyTech: Perhaps no tech company is as recognizable internationally -- for better or worse -- than Microsoft Corp. The veteran firm's operating systems run billions of computers worldwide, and it makes the world's second best-selling video game console to boot.

But where Microsoft has dominated in sales, it's struggled in expansion and image. Between 1991 and 2001 Microsoft grew 12 fold in revenue. Between 2001 and 2011 it grew only 2.5 times.

Microsoft is facing much the problem of the British Empire at its peak in the Victorian era -- whither to expand? Microsoft has found success in the console/video game market, but it's other efforts -- tablets, smartphones, internet advertising, MP3 players, etc. -- have been money sinks and have failed to generate significant market share.

This struggle has led investors to forsake Microsoft. The company is expected to report record yearly revenue of $70B USD and record profit of $22B USD in profit, for its fiscal year 2011 (calendar Q3 2010 - Q2 2011). Stock prices have only risen 6 percent, approximately during that year, even as profits are expected to rise 22 percent. Perhaps investors are waiting for the actual numbers to land, but there seems to be a definite antipathetic sentiment when it comes to Microsoft's stock.

That has allowed rival Apple, Inc. (AAPL) to depose it as the biggest market cap stock in the tech industry. To put that in perspective, Apple sells fewer products than Microsoft in units. Windows 7 license sales recently hit 400 million for the year, meaning Microsoft likely sold around 200 million licenses in the last year. Meanwhile, Microsoft is expected to sell around 20-25 million Xbox 360s. Microsoft won't reveal exact Microsoft Office 2010 sales figures, but it's estimated to be in the tens of millions as well.

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