Linked by Thom Holwerda on Thu 19th Jul 2012 23:57 UTC
Microsoft "Microsoft today announced quarterly revenue of $18.06 billion for the quarter ended June 30, 2012. Operating income and loss per share for the quarter were $192 million and $0.06 per share. The financial results reflect the previously announced non-cash, non-tax-deductible income statement charge of $6.19 billion for the impairment of goodwill and the deferral of $540 million of revenue related to the Windows Upgrade Offer."
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Microsoft reports first loss in history
by Governa on Fri 20th Jul 2012 05:02 UTC
Member since:

Microsoft reports first loss in history and gets little to no attention from OSnews aka Thom's Blog. Riiiight...

Reply Score: 2

bassbeast Member since:

Uhhh...he says right there that they posted a loss, and he also posted the earning for Google, what more do you want?

Its not like the entire planet doesn't know MSFT is a total disaster right now, you have articles talking about "the lost decade" while Forbes names Ballmer worst CEO, Windows 8 looks like it'll be the second coming of MS Bob and they can't give away the WinPhone, so what else do ya wanna know?

"MSFT run by lousy CEO, company bleeds money, now for the weather...water is wet...back to you Chuck". Not really any more to say friend, its not like MSFT is gonna listen, or change direction, not as long as Ballmer and Sinofsky work there. When the board gets tired of flushing billions down the toilet (how many HAS Ballmer blown? 30? 40?) and punts Ballmer like a 30 yard field return THEN it'll be news, but MSFT sucking and lost since Ballmer took over? who doesn't know that?

Reply Parent Score: 5

gedmurphy Member since:

Its not like the entire planet doesn't know MSFT is a total disaster right now,

Microsoft posted an operating income of $6.9 billion profit. I'm struggling to see how this means Microsoft is a total disaster.

Reply Parent Score: 5

MollyC Member since:

Maybe Thom didn't make a big deal of it because he realizes that this "loss" is just on paper? The loss actually took place 5 years ago with a bonehead purchase of aQuantive; a 6 billion dollar purchase that resulting in no revenue.

Microsoft just happened to take the charge for that debacle this quarter; they could've done taken the charge for any of the previous 10 quarters or any of the upcoming 10 quarters. In other words, the aQuantive loss has nothing to do with the state of the company for this particular quarter; it reflects a stupid decision made years ago.

What really reflects the state of the company for this quarter is the record earnings (contrary to the rantings of bassbeast). Note that Wall Street ignored the "loss" (as the aQuantive charge had been announced weeks ago), and liked the record earnings which clobbered the expectations.

Edited 2012-07-20 05:50 UTC

Reply Parent Score: 10

gedmurphy Member since:

You clearly don't understand financial reports. Thom is actually one of the few news sites not to use that as a headline grabber / flame bait.

Microsoft has had an extremely profitable quarter. In fact, they were so profitable that they decided to write down the value of assets pertaining to a company it acquired back in 2007.
When stuff like that happens, you write down the value of those assets on the balance sheet. It does not represent a cash expense, it's just an accounting loss driven by a 2007 acquisition.

Reply Parent Score: 6

tanzam75 Member since:

Frankly, I preferred the pre-2001 situation, in which companies were allowed to amortize goodwill. The cost of an acquisition should be reflected over time, rather than taken as a lump-sum impairment.

By forcing goodwill to stay on the books until impaired, GAAP has set up a situation in which the accounting fails to reflect the actual economic situation, no matter which way you look at it. You can't look at GAAP results, because they claim that Microsoft lost money this quarter, which is obviously untrue. You can't use the non-GAAP results either, because they claim that Microsoft did not waste a penny on aQuantive back in 2007, which is also untrue.

Amortization has problems -- how long do you amortize over? But that can be solved with rules -- and after all, the whole point of GAAP is that it's rules-based while IFRS is principles-based. When the FASB threw out amortization entirely in 2001, they threw out the baby with the bathwater. They traded a flawed-but-logical situation for a completely ridiculous situation.

Edited 2012-07-20 17:12 UTC

Reply Parent Score: 2