>> Office does not represent a "growth" market, instead a stable revenue stream every couple of years.
That's true and neither does the operating system. But deep penetration and profitability in these two markets have turned Mr. Softee from a growth company into an incredible cash cow, as indicated in the following snippet from their October 10Q:
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Cash and short-term investments totaled $36.16 billion as of September 30, 2001. The growth in the cash balance during the quarter included net purchases of approximately $1.2 billion in short-term investments near September 30 as part of Microsoft's normal management of the investment portfolio, which were settled after the balance sheet date. The Company is required to recognize the investments on the trade date rather than the settlement date, accordingly there was a corresponding increase in other current liabilities.
Cash flow from operations was $3.39 billion in the September quarter of fiscal 2002, compared to $2.96 billion in the September quarter of fiscal 2001. The increase was primarily attributable to the growth in operating income and other changes in working capital in the September quarter of fiscal 2002. Cash used for financing was $734 million in the September quarter of fiscal 2002, a decrease of $562 million from the first quarter of the prior year, reflecting a decrease in common stock repurchased. During the September quarter of fiscal 2002, the Company repurchased 21.6 million shares of common stock under its share repurchase program, compared to 25.5 million shares repurchased in the first quarter of the prior year. Cash used for investing was $3.47 billion in the September quarter of fiscal 2002, a decrease of $467 million from the first quarter of the prior year.
Microsoft has no material long-term debt.
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Personally, I don't think even success in the gaming sector will transform msft into a growth company, butI believe they will command a high valuation anyway due to their strong franchises and profitability.
jmho,
uf |
