Microsoft posts first loss as a public company
aQuantative right-off for $6bn sends software giant in the red
By Juan Carlos Perez | IDG News Service | Published 09:23, 20 July 12
Microsoft reported its first ever loss as a public company, the software giant said on Friday.
Revenue at the company, which listed in 1986. rose slightly but due to several one-time items it posted a fourth quarter net loss when the Windows division's sales fell 13 percent.
Revenue in the quarter ended 30 June came in at US$18.06 billion (£11.5 billion), up 4 percent year-on-year, but below the $18.13 billion expected by financial analysts polled by Thomson Financial.
CFO Peter Klein said in a statement the company achieved "solid revenue growth" during the quarter and showed "rigorous cost discipline".
The company posted a net loss of $492 million, or a loss of $0.06 per share, compared with net income of $5.87 billion, or $0.69 earnings per share, in 2011's fourth quarter.
The results were significantly affected by two one-time items the company had previously disclosed. They include a $540 million revenue deferral related to an upcoming upgrade program for its new Windows 8 OS and a charge of $6.19 billion for the impairment of goodwill on its online services division.
The goodwill impairment is in recognition that its online services division will not grow as quickly as previously expected, an issue related mostly to the 2007 acquisition of aQuantive for $6.3 billion.
Excluding the impact of those two items, revenue would have been $18.59 billion and earnings per share would have been $0.73.
The consensus from the polled analysts was for $0.62 earnings per share in the fourth quarter.
The Windows and Windows Live Division, which includes Windows 7, saw its quarterly revenue drop 13 percent year-on-year, and fall 3 percent in fiscal year 2012 compared with 2011.
The server & tools business, which includes products like SQL Server and System Center, posted revenue growth of 13 percent in the quarter and 12 percent in the year.
The business division, which includes the Office suite, posted revenue growth of 7 percent in the quarter and the year.
The entertainment and devices division, which includes the Xbox products, increased revenue 20 percent in the quarter and 8 percent in the year, helped primarily by Skype.
CEO Steve Ballmer said Microsoft's business will be driven forward in the coming year as the company delivers the many upgrades it has in the pipeline, including Windows 8 and a new version of Office.
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