Microsoft Corporation (MSFT): This Clearly Isn’t Working

Its performance time

Talking about quarterly results, let us start with Apple Inc. (NASDAQ:AAPL), is in the news since the announcement of its Q2 2013 results. For the first time in a decade, Apple reported a decline in year over year profits, to the tune of 18%. One of my major takeaways from this result is a slowdown of innovation and experimentation. Apple Inc. (NASDAQ:AAPL) exemplifies innovation and owes its resurrection to such.  In order to sustain the expectations of investors, Apple Inc. (NASDAQ:AAPL) needs to innovate, invent and design revolutionary products like the iPod and iPad, that customers cannot refuse to buy.

Google Inc (NASDAQ:GOOG) reported a solid first quarter with revenues up by 31% to $14 billion and GAAP operating income pegged at $3.48 billion. Expenditure in the quarter increased on account of restructuring charges related to Motorola Mobility, that incurred an operating loss of $271 million. Traffic acquisition costs (TAC) stayed stable at approximately 25% of ad revenues throughout the year, enabling the company to convert a similar percentage of revenues to profits as last year.

Microsoft Corporation (NASDAQ:MSFT), as I mentioned earlier, declared positive results for the quarter with revenues of $20.49 billion. One of the segments that stood out for phenomenal performance was the Entertainment and Devices division, which generated net income of $342 million as compared to an operating loss of $228 million in the previous year. Such strong performance can be attributed to the growth of Xbox Live, with around 46 million members worldwide.

The bottom line: Skeptical

In spite of seeing a splendid quarterly performance, I am skeptical about investing in Microsoft Corporation (NASDAQ:MSFT). The reason behind this is the uncertainty around its main division, Windows 8. When a company declares a product as revolutionary as Windows 8, I expect it to bring about a major positive shift in business operations and financials. The company has forayed again into tablet devices with its Windows 8 OS and even though we are seeing some positive reception, I do not think it’s enough to call it a comeback.

In my opinion, it would not be prudent to invest in Microsoft Corporation (NASDAQ:MSFT) until some concrete numbers can be seen for its flagship product, Windows 8.

The article Having Everything at Once Is Not Working for This Company originally appeared on Fool.com.

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