Microsoft reports Q2 2013 earnings: posts record revenue of $21.5 billion, $6.38 billion profit (update)

This isn’t the end of earnings season, but this is the final member of the unholy trinity . Microsoft is reporting that during the second quarter of its 2013 financial year it set a revenue record by raking in $21.5 billion. Of that $6.38 billion was pure profit, lining shareholder’s pockets to the tune of $0.76 per share. While EPS was down year-over-year, net income was up dramatically from $5.87 billion a year ago and $5.31 billion last quarter. The Windows division accounted for roughly $5.9 billion of Redmond’s revenues, up 24 percent from a year ago, largely thanks to the release of Windows 8. That division is also home to the Surface , which still hasn’t seemed to gain much traction with consumers. Interestingly, while Windows was surging, its business division was suffering a not inconsequential drop off — seeing revenues fall 10 percent to $5.7 billion year-over-year. But the Server & Tools department also helped offset some of those declines, with revenue jumping up 9 percent to $5.19 billion. In a sign that it might be time for a bit of a console refresh, the Entertainment and Devices division saw revenues continue to sink, despite the strong holiday sales . While the $3.77 billion in revenue was a stark increase over Q1’s paltry $1.95 billion, it’s still a 7 percent fall from the same time period last year. Thankfully, its Online Services continued to grow, reaching $869 million in revenue — an 11 percent growth year-over-year, and a sign that it’s various web services aren’t sinking ships. Most notably ad revenue was up 15 percent thanks largely to an increase in revenue-per-search. Revenue growth over Q2 2012 wasn’t huge, but it was certainly notable and net income didn’t drop dramatically. And, perhaps most importantly for investors, results were pretty much inline with Wall Street expectations. It’s also worth noting that some revenue has been deferred, $1.3 billion to be exact, thanks to various upgrade offers and video game deals — though, the company did report previously deferred revenues due to pre-sales of Windows 8. There’s PR after the break but, if you want to dig through all the detailed tables of financial data you’ll have to hit up the source link. And check back in for updates when the earnings call gets under way at 5:30PM ET. Updates : 5:36PM CFO, Peter Klein says that 60 percent of computers worldwide are running Windows 7 while the company has managed to push out 60 million Windows 8 licenses. 5:40 Microsoft doesn’t seem particularly worried about the declining PC market as Windows revenues outpaced sales of x86 machines by a significant margin. 5:45 Windows Phone sales were four times what they were last year. 5:53 Microsoft stands by its story that Surface is “just one part of the Windows 8 story.” Though, it did say that it will “expand retail distribution and availability” so don’t expect the in-house slate to go quietly into that good night. Show full PR text Microsoft Reports Record Revenue of $21.5 Billion in Second Quarter Strong business demand and key product launches drive record revenue. REDMOND, Wash. – Jan. 24, 2013 – Microsoft Corp. today announced quarterly revenue of $21.46 billion for the quarter ended December 31, 2012. Operating income, net income, and diluted earnings per share for the quarter were $7.77 billion, $6.38 billion, and $0.76 per share. These financial results reflect the net deferral of revenue for the Windows Upgrade Offer, Office Upgrade Offer and Pre-sales, and the Entertainment and Devices Division Video Game Deferral, partially offset by the recognition of previously deferred revenue for Windows 8 Pre-sales. The following table reconciles these financial results reported in accordance with generally accepted accounting principles (GAAP) to non-GAAP financial results. We have provided this non-GAAP financial information to aid investors in better understanding the company’s performance. “Our big, bold ambition to reimagine Windows as well as launch Surface and Windows Phone 8 has sparked growing enthusiasm with our customers and unprecedented opportunity and creativity with our partners and developers,” said Steve Ballmer, chief executive officer at Microsoft. “With new Windows devices, including Surface Pro, and the new Office on the horizon, we’ll continue to drive excitement for the Windows ecosystem and deliver our software through devices and services people love and businesses need.” The Windows Division posted revenue of $5.88 billion, a 24% increase from the prior year period. Adjusting for the net deferral of revenue for the Windows Upgrade Offer and the recognition of the previously deferred revenue from Windows 8 Pre-sales, Windows Division non-GAAP revenue increased 11% for the second quarter. Microsoft has sold over 60 million Windows 8 licenses to date. “We saw strong growth in our enterprise business driven by multi-year commitments to the Microsoft platform, which positions us well for long-term growth,” said Peter Klein, chief financial officer at Microsoft. “Multi-year licensing revenue grew double-digits across Windows, Server & Tools, and the Microsoft Business Division.” The Server & Tools business reported $5.19 billion of revenue, a 9% increase from the prior year period, driven by double-digit percentage revenue growth in SQL Server and System Center. “We see strong momentum in our enterprise business. With the launch of SQL Server 2012 and Windows Server 2012, we continue to see healthy growth in our data platform and infrastructure businesses and win share from our competitors,” said Kevin Turner, chief operating officer at Microsoft. “With the coming launch of the new Office, we will provide a cloud-enabled suite of products that will deliver unparalleled productivity and flexibility.” The Microsoft Business Division posted $5.69 billion of revenue, a 10% decrease from the prior year period. Adjusting for the impact of the Office Upgrade Offer and Pre-sales, Microsoft Business Division non-GAAP revenue increased 3% for the second quarter. Revenue from Microsoft’s productivity server offerings – collectively including Lync, SharePoint, and Exchange – continued double-digit percentage growth. The Online Services Division reported revenue of $869 million, an 11% increase from the prior year period. Online advertising revenue grew 15% driven by an increase in revenue per search. The Entertainment and Devices Division posted revenue of $3.77 billion, a decrease of 11% from the prior year period. Adjusting for the Video Game Deferral, the division’s non-GAAP revenue decreased 2% for the second quarter. Xbox continues to be the top-selling console in the United States. During the quarter, Microsoft launched Windows Phone 8 with a broad array of carriers and devices. Business Outlook Microsoft reaffirms fiscal year 2013 operating expense guidance of $30.3 billion to $30.9 billion. Webcast Details Peter Klein, chief financial officer, Frank Brod, chief accounting officer, and Chris Suh, general manager of Investor Relations, will host a conference call and webcast at 2:30 p.m. PST (5:30 p.m. EST) today to discuss details of the company’s performance for the quarter and certain forward-looking information. The session may be accessed at http://www.microsoft.com/investor. The webcast will be available for replay through the close of business on Jan. 24, 2014. Adjusted Financial Results and Non-GAAP Measures For second quarter fiscal year 2013 GAAP revenue, operating income, and earnings per share growth included the net deferral of revenue for the Windows Upgrade Offer, the Office Upgrade Offer and Pre-sales, and the Entertainment and Devices Division Video Game Deferral, and the recognition of previously deferred revenue for Windows 8 Pre-sales. These items are defined in our Form 10-Q for the quarterly period ended December 31, 2012. In addition to these financial results reported in accordance with generally accepted accounting principles (GAAP), we have provided certain non-GAAP financial information to aid investors in better understanding the company’s performance. Presenting these measures without the impact of these items gives additional insight into operational performance and helps clarify trends affecting the company’s business. For comparability of reporting, management considers this information in conjunction with GAAP amounts in evaluating business performance. These non-GAAP financial measures should not be considered as a substitute for, or superior to, the measures of financial performance prepared in accordance with GAAP. Filed under: Misc , Microsoft Comments Source: Microsoft

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Microsoft reports Q2 2013 earnings: posts record revenue of $21.5 billion, $6.38 billion profit (update)

Secret backdoors found in firewall, VPN gear from Barracuda Networks

A variety of firewall, VPN, and spam filtering gear sold by Barracuda Networks contains undocumented backdoor accounts that allow people to remotely log in and access sensitive information, researchers with an Austrian security firm have warned. The SSH, or secure shell, backdoor is hardcoded into “multiple Barracuda Networks products” and can be used to gain shell access to vulnerable appliances, according to an advisory published Thursday by SEC Consult Vulnerability Lab. “This functionality is entirely undocumented and can only be disabled via a hidden ‘expert options’ dialog,” the advisory states. The boxes are configured to listen for SSH connections to the backdoor accounts and will accept the username “product” with no Update: a “very weak” password to log in and gain access to the device’s MySQL database. While the backdoors can be accessed by only a small range of IP addresses, many of them belong to entities other than Barracuda. Read 4 remaining paragraphs | Comments

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Secret backdoors found in firewall, VPN gear from Barracuda Networks

Three Developer Tips for Temple Run 2 Success

Now that Stephen Totilo has painstakingly researched the best way to control Temple Run 2 ( now available on Android ), it’s time to get down to business. You know how to jump, dodge and slide, but do you know how to truly excel? The fine folks at Imangi Studios have shared three tips for racking up a score you’ll be proud to see on the leaderboards. More »

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Three Developer Tips for Temple Run 2 Success

Intel gets go-ahead for $4 billion chip plant in Ireland, will produce its next-gen 14nm processors

Intel has been planning to make its Ireland base one of three global manufacturing sites for its 14nm chips since May last year , and its now been given the okay by Ireland’s lead planning agency. The new $4 billion plant will create around 4,300 jobs for the region in Co. Kildare, where Intel already has around 4,000 on staff. The two-year plan involves redeveloping its existing operation, expanding and shifting to make its smaller, more efficient 14nm process. Intel’s plans don’t stop there, however. It still plans to roll out 10nm products sometime in 2015. Filed under: Desktops , Misc , Laptops , Intel Comments Via: Silicon Republic Source: Pleanala

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Intel gets go-ahead for $4 billion chip plant in Ireland, will produce its next-gen 14nm processors

Grammar badness makes cracking harder the long password

Comparison of the size of password search space when treating the password as a sequence of characters or words, or as words generated by grammatical structure. Rao,et al. When it comes to long phrases used to defeat recent advances in password cracking, bigger isn’t necessarily better, particularly when the phrases adhere to grammatical rules. A team of Ph.D. and grad students at Carnegie Mellon University and the Massachusetts Institute of Technology have developed an algorithm that targets passcodes with a minimum number of 16 characters and built it into the freely available John the Ripper cracking program. The result: it was much more efficient at cracking passphrases such as “abiggerbetter password” or “thecommunistfairy” because they followed commonly used grammatical rules—in this case, ordering parts of speech in the sequence “determiner, adjective, noun.” When tested against 1,434 passwords containing 16 or more characters, the grammar-aware cracker surpassed other state-of-the-art password crackers when the passcodes had grammatical structures, with 10 percent of the dataset cracked exclusively by the team’s algorithm. The approach is significant because it comes as security experts are revising password policies to combat the growing sophistication of modern cracking techniques which make the average password weaker than ever before . A key strategy in making passwords more resilient is to use phrases that result in longer passcodes. Still, passphrases must remain memorable to the end user, so people often pick phrases or sentences. It turns out that grammatical structures dramatically narrow the possible combinations and sequences of words crackers must guess. One surprising outcome of the research is that the passphrase “Th3r3 can only b3 #1!” (with spaces removed) is one order of magnitude weaker than “Hammered asinine requirements” even though it contains more words. Better still is “My passw0rd is $uper str0ng!” because it requires significantly more tries to correctly guess. Read 9 remaining paragraphs | Comments

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Grammar badness makes cracking harder the long password

Hola Unblocker Gives You Access to iPlayer, Netflix, Pandora, Hulu, and More Regardless of Region

Chrome/Firefox: Hola Unblocker is a browser extension that removes region locks and allows you to watch BBC iPlayer, Netflix, Hula, Pandora, and more regardless of where you live. It doesn’t require any set up and works right out of the box. More »

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Hola Unblocker Gives You Access to iPlayer, Netflix, Pandora, Hulu, and More Regardless of Region

Wolfram Alpha expands Facebook analytics, takes a closer look at your social relationships

Have you ever wanted to know if you’re the most popular amongst your group of friends? Or which of your pals lives the furthest from you? These are questions that can’t be answered by Facebook’s latest Graph Search , but they’re perfect for the stats geeks over at Wolfram Alpha . The group started mining Facebook for data last year , but have recently expanded its analytics to include a closer look at your social relationships. Namely, they’ve identified five “network roles:” social insiders, outsiders, neighbors, gateways and connectors. Insiders share the same friends while outsiders don’t, neighbors don’t have a lot of buddies outside of your network while gateways do, and connectors are those that bridge two networks together, like a college buddy who went to the same high school. Combined with location, age and other info, this data unlocks an array of potential visualizations color-coded by different categories, letting you see patterns you might not have noticed before. If you think the analysis ends there, think again; by enabling a “Historical Analytics” feature, you’ll be allowing Wolfram Alpha to continually collect your info so you can see how your Facebook profile changes over time. If you’re not creeped out by that notion, jump on over to the rightmost source link and fill in the appropriate details to see just how well you know your “friends.” Note: It seems that Facebook has limited Wolfram’s API calls, so you might get an error when accessing the tool for now. Filed under: Internet Comments Source: Wolfram Alpha Blog , Wolfram Alpha

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Wolfram Alpha expands Facebook analytics, takes a closer look at your social relationships