Microsoft posts first-ever quarterly loss
It was the Online Services Division's fault, honest
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As was widely expected, Microsoft announced a loss of $0.06 per share for the fourth quarter, ended in June, which marks the first time the software giant has posted a quarterly loss in the 26 years it has been a public company.
Most of that drop is attributable to a previously announced $6.2bn charge that resulted from Redmond's botched acquisition of online ad service aQuantive.
In addition, Microsoft says it has another $540m in revenue related to the Windows 8 Upgrade program that must be deferred until next quarter, once the company has actually shipped customers the upgrades.
Believe it or not, though, other than those two little items, the news from Redmond is generally rosy. Microsoft earned $18.06bn in revenue for the fourth quarter (a record) and $73.72bn for fiscal year 2012 (another record), according to its financial-results report on Thursday.
Revenue grew for most divisions of the company, with the exception of the Windows and Windows Live Division, but most of that division's decline can be chalked up to the aforementioned deferred upgrades.
Microsoft's flagship products keep selling, too. Redmond says Microsoft Office is now installed on one billion PCs around the world, and that 50 per cent of desktop PCs worldwide now run Windows 7.
Even the beleaguered Online Services division, which runs the unpopular Bing search engine, reported revenue growth of 8 per cent – if not actual profits. (It was this division that took the aQuantive charge.)
So while most Microsoft-watchers will doubtless be buzzing about the quarterly loss, for Microsoft this quarter was really about taking the bad with the good. Revenues are solid, and with the launches of Windows 8, Windows Server 2012, Office 2013, and Windows Phone 8 all due in the coming year, this quarter may be the Redmond-haters' last chance to gloat. ®
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COMMENTS
"When some of the lappy companies offered it, no one wanted it"
I always take a look at those offers, but every time I look I find it's cheaper to get a Windows laptop and install Linux myself.
the dinosaur is staggering
The failure in this quarter shows that MS are vulnerable. They are in poor shape.
1) Desktop sales are flat at best
2) Mobile platforms are popular but MS are not a player
3) Zune and then WinPho7 shows that the market rejects Metro, yet the company is betting the farm on Metro on its forthcoming mobile devices
4) Win8 is putting Metro on Desktops, which will earn MS more scorn and ridicule than Vista
5) It's Surface vapourware announcement is irritating its partners.
6) MS partnered with Sendo, Danger and Nokia and has destroyed those companies (Nokia dying fast). Other partners will trust MS even less than usual.
7) Linux desktop is free, and it's good (much better than Metro). Linux was ridiculed by MS but it has eaten their lunch on servers, and now on mobiles (Android has a Linux kernel). Linux desktop could happen faster than MS thinks if corporations see no future in Windows, which is expensive, and only needs employers to use cloud apps or native Linux apps (which are generally free).
8) Open source software is rising fast. Clouds are mostly made from open source systems. Open source frees corporations from licence management and the risk of being sued (rightly or by mistake)
9) MS has an awful lot of enemies, many of whom are insanely powerful in their areas. Apple, Google, Oracle, Sony, Samsung, Nintendo, Amazon, IBM, Redhat, Canonical, the Open Source community
10) MS is failing at search. Bing costs them a loss of 2 billion dollars a year and even with that investment is not able to dislodge google, whose search engine is profitable.
11) MS is failing at the Cloud. Open source has won that battle (and vendors that use open source, such as Amazon).
12) MS Office has competition from Google Docs in the cloud and from Libre Office, which is now improving fast having forked from Open Office to get away from Oracle.
13) Microsoft has no vision other than to copy its competitors. Where it does innovate, it produces artefacts that are either unusuable or in poor taste (ribbon, metro)
14) Microsoft's browser has gone from 95% share to less than 40% share and is still in freefall.
15) Microsoft has lost the goodwill of developers.
16) Microsoft is turning into a patent troll, and is attacking Android and Linux organisations, acting exactly like the mafia. This garners MS ill will.
17) Microsoft is not seen as sexy, it is seen as a boring spreadsheet company.
18) Steve Balmer and Bill Gates, the least visionary leaders of tech.
Microsoft have a lot of money and will buy their way out of various problems, but money can run out rather quickly, even scores of billions ;-)
Re: the dinosaur is staggering
Indeed, the dinosaur is staggering, but you missed the big issue:
MS managed to post a loss despite record (and quite mind-boggling) earnings. So they manage to spend money faster than it's coming in, even though it's coming in quite fast. What if one of their big earners stumbles, e.g., because world and dog decides that they can live without the newest version of MS Office?
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