Microsoft making a loss? Oh dear. Thankfully there are extenuating circumstances behind the quarterly loss, and investors are actually rather optimistic after the latest financial results.
As reported by The Guardian, Microsoft has made a loss of $492 million in the three months to the end of June. This is the first loss the company has reported since going public in 1986. The reason for the loss is the company writing down the value of Aquantive, which it acquired for $6.2 billion in 2007.
Buying Aquantive was Microsoft’s attempt to catch up to Google in the lucrative online advertising game. But this arm of the business has failed to bring in the expected profits, leading to the writing down of its value and the subsequent loss. Although the $492 million isn’t a big number for Microsoft, it should be remembered that Microsoft made a profit of $5.9 billion in the same quarter in 2011.
Revenue remained strong however, rising 4 percent to $18.06 billion. That’s a new record for the company for the second quarter. Revenue of $73.72 billion for the fiscal year also marked a new record high for the company, which should counter the disappointment of the loss somewhat.
Microsoft CEO Steve Ballmer, always a polarizing figure at the company, stated:
“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.”
The Microsoft share price rose in after-hours trading, showing investors are confident Microsoft has a bright near-future ahead of it. That near-future is packed full of the release of important products, as Ballmer implied, with Windows 8, Windows Phone 8, the new Xbox games console, the Surface tablet, and more all due out before the end of 2013.
These are exciting times at Microsoft, even with the naysayers reporting that it’s a company on the rocks facing an uncertain future in this post-PC era.