Oh jeezus, all right you guys, I'll go dig up some numbers for you. I thought this was common knowledge by now since I've been pointing it out every quarter for over a year, but here goes:
First, look at MSFT's financials
siliconinvestor.com
The Earnings Per Share figures are the most important numbers, because those are the ones that your average retail investor looks at, and are the ones that the TV analyst/cheerleaders look at when figuring out the P/E.
I'll just look at last quarter's (ending March 2001) Earnings Per Share numbers, and leave the rest as an exercise for the reader.
Earnings Per Share, Mar 2001: 0.440
Now where does that number come from? Go to MSFT's SEC filings, click on the 10-Q filed 5/15/01, and click on their Income Statement:
siliconinvestor.com
You will find that their Operating income was $2998M, "losses on equity investees and other" was ($46M), and Investment income was $706M. The Net income before income tax is therefore $3658M. Then there is an accounting change, and the diluted earnings per share were $0.44.
So as I've been saying, although the contribution of investment income is right there in the 10-Q, it is regularly overlooked by retail investors and bubblevision cheerleaders alike. In the March 2001 quarter, 19.3% of MSFT's net income came from investments. And when you look at MSFT's EPS and P/E, you are seeing both operating income and investment income lumped together.
Maybe the reason people on this thread ignore such statements is because of your mistaken use of terminology.
What in particular are you talking about?
Dave |
