Microsoft posts first ever quarterly loss

By John Leonard
20 Jul 2012 View Comments

In its 26 years as a public company, Microsoft had never reported a quarterly loss - until yesterday, when it posted a fourth-quarter loss of $492m (£313m).

The software giant took a massive $6.19bn (£3.95bn) hit two weeks ago when it was forced to admit that its acquisition of online advertising company aQuantive, bought for $6.3bn (£4.01bn) in 2007 had not yielded the anticipated results in Microsoft's battle for online advertising revenues.

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Microsoft had hoped the aQuantive acquisition would earn them a chunk of Google's $36.5 billion (£23.3bn) annual advertising income.

The quarterly loss takes into account both the aQuantive write down and a $540m (£344m) fund deferred for the firm's Windows Upgrade offer.

This paper loss was widely expected by analysts and Microsoft's successes in other areas meant that its share price actually rose by 2.5 per cent on Thursday, closing at $30.67 on Nasdaq.

Indeed, away from its failed acquisition Microsoft's books are in good health, despite the stagnant PC market. Adjusting for the losses, the firm posted non-GAAP revenue of $18bn (£11.8bn), a 7 per cent year-on-year increase.

Top performers, according to Microsoft's earnings release, include The Server & Tools business revenue, which grew 12 per cent over the year, the Microsoft Business Division revenue (up 7 per cent) and the Online Services Division revenue which grew 8 per cent.

A more successful acquisition, that of Skype in 2011, helped the Entertainment and Devices Division revenue to rise 20 per cent for the fourth quarter, 8 per cent year-on-year.

Pinning many of its hopes for future on the forthcoming Windows 8 operating system, which is released in October, Microsoft will hope the aQuantive buyout can now be confined to history.

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