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Microsoft reports first loss as a public company

Posted: July 19, 2012 10:30 p.m.
Updated: July 19, 2012 10:30 p.m.
 

LOS ANGELES (AP) — Microsoft posted its first quarterly loss in its 26 years as a public company on Thursday as it declared a struggling online ad business a bust and prepared for one of the biggest product updates in its history.

The software company had warned two weeks ago that it would take a $6.2 billion charge in the April-June quarter because its 2007 purchase of online ad service aQuantive failed to help it compete with Google Inc. The amount reflected the bulk of the $6.3 billion acquisition cost.

The online ad business remains just a tiny part of Microsoft — comprising just 4 percent of its annual revenue. Most of the company’s sales come from its Office suite of productivity software, Windows operating system and, increasingly, computer servers.

Upbeat business software and server sales in the quarter helped offset a flat market for personal computers, which had put a damper on Windows sales. Taken as a whole, the software giant’s results beat analyst expectations.
Shares rose 2.4 percent to $31.39 in after-hours trading following the earnings announcement.


Including the big write-down on aQuantive, Microsoft booked a $492 million loss in the fiscal fourth quarter, or 6 cents a share. That compares with earnings of $5.9 billion, or 69 cents, a year ago.

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