Microsoft (MSFT) is something of an enigma.
On the one hand, Microsoft is in the crosshairs of the post-PC movement — one that has seen PC sales and shipments fall for five consecutive quarters, including an 11% drop for the most recent quarter.
Tablets are all the rage, with research firm Gartner projecting 200 million in shipments for the devices to exceed notebooks for the first time. But MSFT is thoroughly botching the mobile movement, taking it in the shorts last week after announcing $900 million write-off for its Surface tablet inventory backlog.
Yet on the other hand, MSFT has roared ahead nearly 20% year-to-date despite last week’s kicking. And more importantly, Microsoft sure knows how to print money.
Despite the write-off, Microsoft increased its cash position year-over-year by $14 billion, leaving it with $67 billion in the bank. The company also enjoyed Q4 revenue gains across its Business (14%), Windows (6%), and Servers and Tools (9%) divisions, and net operating cash flow from its still immensely profitable platforms was nearly $6 billion. PC sales might be declining, but MSFT’s install base — and thus, its potential upgrade business — won’t crack for some time.
Microsoft has increased its dividend every year since it initiated its quarterly payout in 2004, from 8 cents then to 23 cents now, and every hike in that time has been by double-digit percentages, so expect the same service in September, when MSFT is likely to announce its yearly hike.