The last time Microsoft ( MSFT) reported earnings, the software giant threw its stock into a tailspin, announcing
Microsoft's Home & Entertainment division, which encompasses the original Xbox and the Xbox 360, has turned a profit only once, and that was in the December quarter of 2004, when sales were driven by the success of the Halo2 game. For the first nine months of the current fiscal year, H&E lost $848 million on sales of $3.1 billion, compared with a loss of $485 million on sales of $3.14 billion a year earlier.Goldman's Sherlund said in a note to clients last month that "the rapidly growing Xbox business will have turned positive by fiscal 2008, adding to earnings and to overall operating margins." His company has an investment banking relationship with Microsoft. There's one other wild card in the home entertainment deck: the possibility that Microsoft will announce the jocularly dubbed "xPod,"