Microsoft Reports First Loss, Looks Ahead to Windows 8/Surface Launches

The tech giant reported a net loss of $492 million (6 cents per share) for the quarter ended June 30, 2012

For the first time since it went public in 1986 Microsoft posted a quarterly loss, but the company managed to do better than Wall Street expected.

The tech giant reported a net loss of $492 million (6 cents per share) for the quarter ended June 30, 2012. Microsoft posted a profit of $5.87 billion (69 cents per share) the same time a year ago.

The loss was expected, however, because of the $6.2 billion write-down of its 2007 acquisition of aQuantive, an online advertisement company. Microsoft also took a hit because of $540 million in deferred revenue from a Windows 8 upgrade.

Despite posting its first loss since going public, Microsoft reported a revenue increase of 4 percent to $18 billion. This was mainly due to the strong growth in its Office sector, but at the same time, this number was slightly below analyst expectations. Microsoft suffered from slow computer sales that featured the Windows OS, but with Windows 8 on the horizon, people may be waiting for its release before buying a new Windows-packed computer.

Microsoft said it earned a total of 67 cents per share during the quarter, excluding the write-down but including the deferred revenue. Wall Street analysts expected a profit of 62 cents per share.

Microsoft has a lot to look forward to with Windows 8 being released on October 26, and its first tablet entry, "Surface," coming soon after that.

"We delivered record fourth quarter and annual revenue, and we're fast approaching the most exciting launch season in Microsoft history," said Steve Ballmer, Microsoft CEO. "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."

Looking ahead, Microsoft predicts a fiscal year 2013 operating expense of $30.3 billion to $30.9 billion.


Sources: Microsoft, The Wall Street Journal