Microsoft Announces First Ever Quarterly Loss
But it's actually not that bad.
Microsoft posting a loss for the first time in its history was more dramatic than the stock reflected, being down about 1.4 percent on Friday. Microsoft burdened its online division with a $6.19 billion impairment charge for the loss in value of Aquantive. The result was a $492 million bottom line loss on record revenue of $18.06 billion. One year ago, Microsoft reported for the second calendar quarter (fourth fiscal quarter) revenue of $17.372 billion and a profit of $5.87 billion.
What is more notable than the "loss" is that most of Microsoft's business are healthy and are driving revenue and profitability increases. Sales of the Business unit (which includes Office), climbed from $5.87 billion in the second calendar quarter (CQ2) 2011 to $6.29 billion in CQ2 2012. Server division sales climbed from $4.52 billion to $5.09 billion and the entertainment unit jumped from $1.49 billion to $1.78 billion on record sales of 1.1 million Xbox consoles, 15 percent growth of Xbox Live subscribers and slowly improving Windows Phone sales.
The concerns are anchored in the Online division, which improved its loss by $266 million with an operating loss of $479 million (down from $745 million last year). Revenue was $0.74 billion, up from $0.68 billion in CQ 2011. It is clear that Microsoft is still struggling to make its Online business bring in a profit. The other interesting weakness is Microsoft's Windows division. Total revenue was $4.69 billion, but Microsoft is deferring Windows 8 upgrade revenue of $0.54 billion and about the same again for the current quarter. One year ago, Windows revenues were $4.74 billion and sales peaked in the third calendar quarter 2011 at $4.87 billion. The fact that Windows 8 is on the horizon surely impacts sales, but the persistent decline since CQ3 of 2011 to $4.74 billion in the fourth quarter and to $4.62 billion in the first quarter of 2012 is more pronounced than we would have expected.
Of course, Microsoft says that Windows 8, scheduled for an October 26 release, will drive PC sales. Due to the upgrade offer, the company expects Windows revenues in Q3 and Q4 to slightly trail the growth of the PC market. Overall revenue growth will be in the "high teens", Microsoft said.

Their Q3-Q4 performance will actually be the thing to watch for.
also Microsoft managed to increase Skype usage by 50 percent http://www.techatron.net/2012/07/microsoft-managed-to-increase-skype.html
and finally launched Office Web Apps for SkyDrive http://www.techatron.net/2012/07/microsoft-launches-office-web-apps-for.html
Their Q3-Q4 performance will actually be the thing to watch for.
also Microsoft managed to increase Skype usage by 50 percent http://www.techatron.net/2012/07/microsoft-managed-to-increase-skype.html
and finally launched Office Web Apps for SkyDrive http://www.techatron.net/2012/07/microsoft-launches-office-web-apps-for.html
um.... what on earth are you talking about? If you read the article it is only one division that is negative, and the OS division is 'less positive' but still making 4.6 Billion dollars... in one quarter. Just about every other department grew, including WP sales (surprising considering how many of us are waiting for WP8), and xBox consoles and Live subscriptions when a new console will be coming ~Christmas 2013 and everyone in the gaming world knows it.
also microsoft managed to increase Skype usage by 50 percent http://www.techatron.net/2012/07/microsoft-managed-to-increase-skype.html
and finally just launched Office Web Apps for SkyDrive http://www.techatron.net/2012/07/microsoft-launches-office-web-apps-for.html
Accounting procedure related, not actual $$ loss.
M$ certainly does not have the profit margins that Apple can command at the moment; but in the long run my money would still be on M$, and not on someone like Apple.
Do you know how many ding dongs that would buy?!
At $30 a share... they are no where near Apple's $604~640 a share.
If I was an investor, I'd sell my MS stock and buy some Apple stock before the iPhone 5 hits the street.
Problem with reading comprehension? They had a record revenue of $18.06 Billion and if it weren't for the impairment charge from Aquantive they would have had roughly $5.7 Billion in profit. The company is very healthy... at least til Win8 gets here and MS sees just how un-phone a desktop really is.
My guess is that there will be a Value Pak or something similar that comes out later to add a Start menu and ditch the Metro UI. If not, well... I bought extra Win7 licenses because of Win8. I'm not going to get stuck with that crap while they figure out that it's WinME 2.0 and scurry for a solution.
They just realized that the 6 billion they spent for Aquantive 5 years ago are gone. Money changed hands 5 years ago, but the loss shows up in their books now.