.NET News Desk
Microsoft Posts Its Very First Losing Quarter
Wall Street figured it would make 62 cents a share on revenues of $18.13 billion
By: Maureen O'Gara
Jul. 23, 2012 05:00 AM
Microsoft has never reported a loss in its 26 years as a public company until Thursday when a gargantuan $6.19 billion write-down on aQuantative, the online ad agency it acquired in 2007 for $6.3 billion to compete against Google, plus $540 million in deferred revenue on Windows 8 nominally caused it to lose money.
It lost $492 million or six cents a share on revenues up 4% to $18.06 billion. It made $5.87 billion, or 69 cents a share last year. Excluding the adjustment Microsoft would have made 73 cents a share.
Wall Street figured it would make 62 cents a share on revenues of $18.13 billion although it had been told the write-off was coming.
Windows revenues were down 13%. If Microsoft did not have to defer some of its Windows sales revenues would be up 1%. Servers and tools were up 13% with an increase in profits of 24%. Office sales were up 7.1%, with profits up 9% apparently on the back of Office 365. The Xbox unit was up 20%. Online revenues were up 8.1%
To stay in the game, it's going to offer buyers of the current Windows 7 a discount to upgrade to snazzy new Windows 8 which is not due out until the end of October when Microsoft will go head-to-head with iPad and Android tablets. The discount will run until the end of January. The delay is depressing PC sales.
"Over the coming year, we'll release the next versions of Windows, Office, Windows Server, Windows Phone and many other products and services that will drive our business forward and provide unprecedented opportunity to our customers and partners," CEO Steve Ballmer said in a statement.
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