Microsoft posts loss, slight revenue increase in Q4

Microsoft revenue rose slightly but due to several one-time items, it posted a net loss during its fourth fiscal quarter, when the Windows division’s sales fell 13 per cent.

Revenue in the quarter ended June 30 came in at US$18.06 billion, up 4 percent year-on-year but below the $18.13 billion expected by financial analysts polled by Thomson Financial.

The company posted a net loss of $492 million, or a loss of $0.06 per share, compared with net income of $5.87 billion, or $0.69 earnings per share, in 2011’s fourth quarter.

The results were significantly affected by two one-time items the company had previously disclosed: a $540 million revenue deferral related to an upcoming upgrade program for its new Windows 8 OS; and a charge of $6.19 billion for the impairment of goodwill on its online services division.

The goodwill impairment is in recognition that its online services division will not grow as quickly as previously expected, an issue related mostly to the 2007 acquisition of aQuantive for $6.3 billion.

Excluding the impact of those two items, revenue would have been $18.59 billion and earnings per share would have been $0.73.

The consensus from the polled analysts was for $0.62 earnings per share in the fourth quarter.

The Windows and Windows Live Division, which includes Windows 7, saw its quarterly revenue drop 13 percent year-on-year, and fall 3 percent in fiscal year 2012 compared with 2011.

The Server & Tools business, which includes products like SQL Server and System Center, posted revenue growth of 13 per cent in the quarter and 12 per cent in the year.

The Business Division, which includes the Office suite, posted revenue growth of 7 per cent in the quarter and the year.

The Entertainment and Devices Division, which includes the Xbox products, increased revenue 20 percent in the quarter and 8 per cent in the year, helped primarily by Skype.

Microsoft sold 1.1 million Xbox consoles, down 39 per cent, but Xbox Live members increased 15 per cent.

The Online Services Division, which includes online advertising generated by Web properties like the Bing search engine, posted an 8 per cent revenue increase.

For the full fiscal year, Microsoft had revenue of $73.72 billion, up 6 percent over 2011. However, net income fell to $16.97 billion, or $2 per share, from $23.15 billion, or $2.69 per share, last year.

“We started this fiscal year with great momentum and closed with a solid finish. Throughout the year, we delivered top-line growth and remained disciplined on cost management while continuing to execute on our product road map,” said CFO Peter Klein during a webcast to discuss the results.

Microsoft benefitted in the fourth quarter from strong demand for its business products and services, in particular Windows 7 and Office 2010, as well as for its Server & Tools products.

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