Microsoft's Q4 solid excluding charges; Windows 8 wait on tap

Microsoft's Q4 solid excluding charges; Windows 8 wait on tap

Summary: The software giant appears to be set up for a bevy of product launches as the company's enterprise products carry the profits.

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Microsoft's fourth quarter had a bevy of moving parts, but the results set the company up for a series of product launches including the latest Windows and Office.

The company reported a fourth quarter loss of 6 cents a share on revenue of $18.06 billion. That sum includes a goodwill impairment charge from the acquisition of aQuantive as well as deferred revenue of $540 million due to Windows upgrade offers. Excluding those items, Microsoft reported non-GAAP earnings of 73 cents a share on revenue of $18.6 billion.

Wall Street was looking for fiscal fourth quarter earnings of 62 cents a share on revenue of $18.12 billion.

Given the addbacks, charges and other items, it's worth noting Microsoft's earnings bridge.

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The biggest thing to note for Microsoft is that its online services unit losses were inflated due to the aQuantive charge. Excluding charges, Microsoft's online services unit reported an operating loss of $479 million, an improvement relative to the $745 million lost a year ago. For fiscal 2012, Microsoft's online division lost $1.93 billion. 

In a statement, Microsoft CEO Steve Ballmer said that the next year will feature "the most exciting launch season" in the company’s history. For fiscal 2012, Microsoft reported earnings of $2 a share on revenue of $73.7 billion. That tally includes charges as well as deferred revenue.

Microsoft's businesses stuck to the script of recent quarters. The server and tools unit delivered fourth quarter revenue growth of 13 percent and the business division, which features Office, was up 7 percent. Microsoft's entertainment and device division saw revenue jump 20 percent largely because it now includes Skype.

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As expected, Microsoft's Windows revenue fell 13 percent in the first quarter. Windows 7 is now on more than half global enterprise desktops.

By the numbers:

  • The business unit was Microsoft's cash cow with fourth quarter operating income of $4.1 billion on revenue of $6.3 billion.
  • The servers and tools unit reported an operating profit of $2.1 billion on revenue of $5.1 billion in the fourth quarter.
  • Windows and Windows Live had operating income of $2.4 billion on revenue of $4.14 billion.
  • Microsoft had cash and equivalents of $6.94 billion with short term investments of $56.1 billion. In total, Microsoft's war chest is $62.04 billion.
  • R&D spending in the fourth quarter was $2.6 billion and $9.81 billion for fiscal 2012.
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Topics: Tech Industry, Microsoft, Windows

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  • Microsoft's Q4 solid excluding charges; Windows 8 wait on tap

    Are you sure you got the right company? A lot of the bloggers on ZDNet tried to lead me to believe that Microsoft is a dying company. Glad I didn't listen to them. Ballmer is right, exciting things are coming for Microsoft for the rest of 2012 and into 2013. All kinds of good products launching.
    Loverock Davidson-
    • Nokia were top dog for a while

      Boy didn't they get a hard landing
      Alan Smithie
      • Nokia hasn't landed yet

        A few years ago, Apple was even worse off than Nokia is today. Thanks to a Microsoft bailout, I think Apple is doing okay today?

        So while I know you really like cheering for thousands of people losing their jobs, maybe just hold off on your celebrations until Nokia is actually gone. Microsoft saved one company that went on to do well years later, hopefully Microsoft can do it again.

        Ironically, for all those people who said that MS is bad for this industry, the fact that we would be without Apple and Nokia today if it weren't for Microsoft's bailouts makes it undeniable that Microsoft has actually been very good for this industry.
        toddbottom3
        • MS didn't save Apple

          And you know it. Love him or loath him, Jobs did.

          As for "I know you really like cheering for thousands of people losing their jobs"

          No, I just don't like one party being in power too long as it has a nasty habit of forming a corrupt, staid and undemocratic ecosystem. I think you call them dictatorships.

          "My business is to comfort the afflicted and afflict the comfortable"
          Alan Smithie
          • Deny all you want

            MS saved Apple. It isn't anything to be ashamed about. It isn't like you are emotinally invested in this, right?
            toddbottom3
          • is not like your not emotionaly invested

            toddyboy, eh....
            theo_durcan
          • Can't it be both?

            Jobs wouldn't have had anything to save if it wasn't for some money from some place, regardless if it was from Microsoft or Coca-Cola or the little old lady at the end of the street that secretly has boatloads of money. Ask anyone starting a new business- it needs money and time. A company trying to change a sinking ship is in a very similar position.
            ikissfutebol
        • Wow

          talk about complete denial. That's fine keep on harping about Apple while your precious Rome burns to the ground.
          CowLauncher
          • Read this before you start blowing on the flames Jack-Wagon

            http://www.macobserver.com/tmo/article/microsoft_posts_first_ever_loss_but_dont_get_excited/

            From a Apple focused site.
            TheBottomLineIsAllThatMatters
        • Even todd's bottom can't wipe this

          http://marketday.msnbc.msn.com/_news/2012/07/19/12837611-microsoft-reports-first-quarterly-loss-ever?lite

          read it and weep, fanbui
          CaviarBlack
          • Is that true?

            This is MS's first quarterly loss ever? After more than 30 years of being in business, this is their FIRST quarterly loss and it was only a loss because of a bad investment and not because their operating expenses exceeded their revenues and they are still profitable for the year?

            Wow, thanks for providing that link. I would have figured that any company that was in business for more than 30 years would have suffered through several ups and downs. Apple, for instance, has had many quarters and even years where they've lost incredible amounts of money. I would expect that from any company that has been in business this long. I'm a little surprised that you would be the one willing to advertise this stunning achievement. Usually you are the first to post negative posts about Microsoft.

            Anyway, thanks again for sharing CaviarBlack and kudos to Microsoft for making it 30+ years without a single quarterly loss. That's well and truly amazing.
            toddbottom3
          • They're supposed to be invincible, todd's bottom

            You mean they're not? That they actually falter?

            Oh golly gee.

            Well I guess you better wipe it while it's still there.

            lol...
            CaviarBlack
          • What is really amazing

            Is how you prove how completely retarded you are on this forum on a daily basis. There' no sense in explaining the difference between a write down and lack of revenue.

            The quarter was actually a record quarter for Microsoft with growth in 90% of their divisions.

            I know your shift at Arby's starts soon, so I'll keep this short for you...
            omdguy
          • and dont forget to thanks Jerry Yang

            imagine a 44B hole in the books. We can say Yang Saved Microsoft, refusing the buyout. Anyhow, MS is sinking. at the end of the day, whatever way you want to spin, a company that's operating at a loss, is sinking. Simple as that.
            theo_durcan
          • Sinking?

            How so? Can you elaborate?
            milo ducillo
          • A company that just made record revenue for a quarter and for the year...

            is one that you think is sinking? What planet are you on? Is that planet called Bizzaro-world?

            And, that same company is due to launch a whole slew of new products and services and software, and whole lot of revised and improved products and services. That, by any sane person's estimate, is a company on the move, and looking to "take over the world". I know, that sounds dangerous, "taking over the world", but, it seems that, Microsoft is the only company making such huge waves in the entire world of tech, with Apple just introducing minor tweaks to its hardware and software, and Google still trying to throw all kinds of things at the wall to see what sticks.

            It seems that, Microsoft is striking fear into the hearts of the Apple and Google fanatics.
            adornoe
          • Lost quarters for them may even turn out to be a trend

            Now that WOULD be good news.

            :)
            CaviarBlack
          • I egg child - and fishy at bets...

            http://www.macobserver.com/tmo/article/microsoft_posts_first_ever_loss_but_dont_get_excited/
            TheBottomLineIsAllThatMatters
          • Take a class in accounting and in reading

            Even Larry said that they made 6.9 billion dollars this last quarter, but because of accounting purposes, had to retroactively count money they had already spent. Accounting is a really weird field where some rules do not make logical sense. Why do you think people may accountants so much money to "fix their books" legally? Of course, you hate Microsoft so you'll ignore everything I have to say.
            ikissfutebol
          • @omdguy eats at Arby's?

            Talk about retarded. What a dick weed.

            Don't you know that's stuff's bad for you? Didn't your mommy tell you that?

            No wonder you weigh 350lbs!

            lol...
            CaviarBlack