Microsoft Reports Q4 FY2012 Earnings; First Ever Loss

Microsoft has reported its earnings for Q2 2012 (Q4 FY12) and while it continues to see steady revenue growth with revenue rising to $18.06 billion, it has reported its first loss ever ($492 million), primarily due to a non-cash goodwill writedown it took due to its failed acquisition of aQuantive in 2007. If we adjust for the impact of the writedown, Microsoft would have reported a profit of more than $5 billion.

As expected the Business (Office and Enterprise) division posted revenue of $6.29 billion, up 7% year-over-year, while the Server & Tools business posted revenue of $5.09 billion, up 13%. The Windows division saw a 1% decline in revenue to $4.15 billion, as Microsoft decided to defer revenue from its Windows 8 upgrade offer to the next quarter. Entertainment & Devices continued to grow the most, with revenue increasing to $1.79 billion, up 20% year-over-year.

Online Services, as usual, continued to be a disappointment, and posted a modest increase in revenue but a massive operating loss, thanks to aQuantive and Microsoft’s other failed endeavors.

The next couple of quarters are going to be very crucial for Microsoft. Sales should be driven primarily by the launch of Windows 8 and Office 15. We also expect Entertainment and Devices revenue to be boosted by sales of the Surface tablets, and the expected launch of the next Xbox sometime in the next year.


Steve Ballmer, CEO of Microsoft, said:

“We delivered record fourth quarter and annual revenue, and we’re fast approaching the most exciting launch season in Microsoft history. 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.”

via Microsoft

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