Microsoft Reports Earnings: $18.06 Billion In Revenue

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News Posted: Thu, Jul 19 2012 7:43 PM
You may think that Microsoft would be losing steam as people hold off on the release of Windows 8 -- not so much. The company is forging ahead, full-steam, too, with a "record Q4." Along with a few other companies in the space this week, Microsoft also released its latest earnings report. The big number is $18.06 billion, which is how much cash the company pulled in during the past three months. Operating income and loss per share for the quarter were $192 million and $0.06 per share. The financial results reflect the previously announced non-cash, non-tax-deductible income statement charge of $6.19 billion for the impairment of goodwill and the deferral of $540 million of revenue related to the Windows Upgrade Offer. Adjusting for these items, non-GAAP fourth quarter revenue, operating income, and earnings per share were $18.60 billion, $6.93 billion, and $0.73 per share, which represented increases of 7%, 12%, and 6%, respectively, over the prior year period.

Still, even with that revenue, they reported a net loss of $492 million compared to a net profit of $5.87 billion this time a year ago. Still, the company is looking forward to the holiday season, with its Surface tablets and Windows 8 (not to mention Windows Phone 8) sure to push earnings sky-high. Also, that aQuantive deal that fell apart a few weeks ago took a $6.2 billion hit on these earnings; things would have looked a lot different had that shaken out differently.


Don't go feeling too bad for the company -- we're guessing that future quarters will more than make up for the slight stumble.
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3vi1 replied on Fri, Jul 20 2012 4:26 PM

This is a very pro-Microsoft spin on their first *ever* quarterly loss as a public company. This is the reason for "Secure Boot"... This is why they were rushing Win8 for October...  This is why the new Office was specifically crafted to not work on XP/Vista.  Bad move, Microsoft.

Still, I'm always amazed at how they put such a positive spin on negative results.  Expect a *huge* advertising blitz for Window 8 over the holiday season, then a lot more Linux/Android lawsuits as the cash dies off three months later.

What part of "Ph'nglui mglw'nafh Cthulhu R'lyeh wgah'nagl fhtagn" don't you understand?

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JDiaz replied on Fri, Jul 20 2012 9:04 PM

Uh, no, the results aren't really that negative because it was only brought down by a collection of one time write offs. So doesn't reflect their long term financial outlook.

A good chunk was just because Microsoft wrote off $6.19 billion in so-called good will related to the 2007 purchase of aQuantive that proved to be a bad investment and another large chunk was to one time things like the $540 million of revenue related to the company’s Windows 8 Upgrade Offer, which they may profit from later if Windows 8 does well.

Though the write down does call into question Microsoft’s future in online advertising, which could lead to questions of Bing’s relevance and future.

However, for now the Microsoft’s Windows and Office empires are still more than strong enough to make up for the company’s many other weaknesses in search, online advertising, and possibly smart phones.

What the future holds for them remains to be seen but we've yet to see them hit by any really bad news...

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3vi1 replied on Sat, Jul 21 2012 9:04 AM

I'm aware they pinned it all on a write-off from a 2007 mistake - I just don't believe it. To say you only ever got <2% of the value out of a $6.3B acquisition smells so funny that I thought it was nitrous oxide.

For years we've been hearing whispers about funny business in Microsoft's accounting practices, and how they make their costs look less via overvalued stock options.  It may finally be reaching a tipping point (Though I do think next quarter will look good on Win8 expectations).

Oh well, when the next loss comes - they have 35 other acquisitions they can blame. That's how many competing companies they've bought-out since aQuantive. Hey, maybe we'll see an $8.4B write-down for Skype in five years!

What part of "Ph'nglui mglw'nafh Cthulhu R'lyeh wgah'nagl fhtagn" don't you understand?

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JDiaz replied on Sat, Jul 21 2012 8:47 PM

"To say you only ever got <2% of the value out of a $6.3B acquisition smells so funny that I thought it was nitrous oxide."

Not really, MS acquisition of aQuantive was to try to beat Google at its own game and they clearly lost. So that investment clearly did not benefit them as intended.

While most of their other acquisitions had to do mostly with patents and they've already made profit on many of them, and their earnings are still on the rise. If not for the mark down they would have had a 67 cents per share increase. So it doesn't seem likely they will be reporting any other major losses.

Though Skype is one of their investments that has yet to bear any major fruit, along with being an even bigger investment than aQuantive, and there are reports of resistance to it in Europe from Carriers. So we'll see how that goes in another year.

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