Microsoft reports first quarterly loss in 26 years, but analysts positive of future growth
Linkedin

Microsoft reports first quarterly loss in 26 years, but analysts positive of future growth

Palo Alto : CA : USA | Jul 20, 2012 at 6:40 AM PDT
XX XX
Views: Pending
 
Microsoft records first quarterly loss in history - IG's Morning Market Headlines 20.07.12

Technology giant Microsoft Corp. has reported its first ever quarterly loss since going public 26 years ago. Nonetheless, Wall Street analysts remain positive of the company’s abilities to deliver better results in the future.

It should be noted that the software company warned two weeks ago that it was likely to take a $6.2 billion charge in its upcoming quarter because its purchase of aQuantive, an online ad service, failed to payoff as expected. The amount is reflective of the $6.3 billion Microsoft paid in 2007 to buy aQuantive to compete with Google.

Failure to turn around profits from the service has led to $492 million loss in the last three months. It is to be noted that before this loss, Microsoft had not delivered a single disappointing quarter since it joined the stock market in 1986.

With the entry of other rivals in the industry, the popularity of Microsoft's Windows operating system has seen a gradual decline over the years. Nonetheless, it has been able to stay strong in other areas such as server and tools business with Microsoft Business Division managing to beat analysts’ estimates.

"Microsoft's enterprise results remain extremely impressive - and guidance for the MBD and S&T business points to a solid outlook for the enterprise businesses in fiscal year 2013," Evercore Partners said, according to a report by Reuters.

J.P. Morgan Securities also sounded positive as it wrote in a note to clients, saying, "Over recent years, Microsoft has demonstrated that it can manage its operations appropriately and this quarter was a good example of that."

Following the J.P. Morgan statement, Microsoft shares have risen by 2.4 percent to $31.39, while revenues by 4 percent to $18.06 billion.

The future of Microsoft now hinges upon the October 26 release of Windows 8, which is being considered the most extreme redesign of the company’s operating system since 1995. The new operating system will not just feature a new look, but will also boost a technology compatible to work with touch-controlled tablet computers.

Chief Financial Officer for Microsoft Peter Klein told analysts that the revenues for Windows will be roughly in line with the PC market and will continue that way for another quarter, according to a report by MSN.

That should be considered an improvement given declining revenues of the company in the past seven quarters.

1 of 25
Next
Handout photo of Microsoft's Surface tablet.
Handout photo of Microsoft's Surface tablet.
Wendy Zachary is based in Texas, Texas, United States of America, and is a Reporter for Allvoices.
Report Credibility
 
  • Clear
  • Share:
  • Share
  • Clear
  • Clear
  • Clear
  • Clear
 
 
 
Advertisement
 

News Stories

 
  • Microsoft set for slate of releases after results

      MarketWatch
    Even when reporting a quarterly earnings loss for the first time since it went public, Microsoft Corp. was still looking strong to investors. Microsoft  closed the books on one of its busiest quarters in recent years by reporting a loss of $492...
  • Microsoft reports first ever quarterly loss

      Channel NewsAsia
    Microsoft posted its first ever loss on Thursday, shedding $492 million in the fourth quarter due to a massive $6.2 billion write-down to reflect the slump in value of its online operations. Microsoft still posted an annual profit of $16.98 billion...
  • Microsoft logs 1st quarterly loss in 26 yrs

      Indian Express
    The staggering charge is due to non-performance of its Internet services division aQuantive which Microsoft had snapped up five years ago. This is for the first time since 1986 when it went public that Microsoft has clocked a quarterly loss. In the...
  • 6 Reasons Why Microsoft's First Loss is Nothing to Worry About

      International Business Times
    Microsoft has posted its first ever quarterly loss since joining the stock market in 1986. But there is no need to panic, and here are the six reasons why. Reports in the last 12 hours have focused on the headline-grabbing figure of Microsoft 's...
  • Microsoft Fourth Quarter 2012 Results: Posts Net Loss of $492 Million

      International Business Times
    Microsoft Corp. on Thursday reported a net loss of $492 million for the quarter ended June 30, 2012. It is the first loss for the company ever since it went public in 1986. Share This Story Microsoft fourth quarter 2012 results that were announced on...
  • Microsoft reports first loss in 26 years

      Daily News & Analysis
    US computing giant Microsoft has reported the first unprofitable quarter since it became a public company in 1986 after it wrote down the value of its failing online ad business, reported RIA Novosti. The loss of $492 million in the fourth quarter...

Blogs

 >

Images

 >
 

More From Allvoices

Report Your News Got a similar story?
Add it to the network!

Or add related content to this report



Use of this site is governed by our Terms of Use Agreement and Privacy Policy.

© Allvoices, Inc. 2008-2014. All rights reserved. Powered by PulsePoint.