On September 23rd 2009, Caris & Co. held a conference call on Microsoft in which many interesting information were released. Caris & Co. analyst Curtis Shauger warned, weakening Xbox 360 sales were likely to hurt top-line results for both the fiscal quarter ending September, and for the June 2010 fiscal year. He trimmed all his forecasts for the Redmond giant. 1st quarter revenue to $12.3 billion from $12.8 billion, and for the full year to $59.1 billion from $59.9 billion.
As Shauger notes, the cuts are based on lowered sales expectations for the Xbox 360, which he explained are being stalled by stronger demand for the PS3 since its recent redesign and re-launch, and Microsoft's own price cuts on the Different Xbox 360 models.
Shauger also points out that, hardware sales are dilutive to earnings, he says, Microsoft lose money on every Xbox 360 it sells. The analyst/investor keeps an average rating on the software giant's stock, being concerned about "the mounting pressure on its market position, and business model."
Interesting tidbits of information from Curtis Shauger, I had no clue Microsoft was losing money on every 360 sold; It'll be fascinating to see their next move if, the PS3 continues to outsell the Xbox 360 2-1. Share your thoughts.