Steven D. Jones and Nathalie Tadena for the Wall Street Journal:
Sustained growth of Microsoft Corp.’s (MSFT) core Office and enterprise software businesses cheered investors even as the software giant swung to a fiscal fourth-quarter loss–its first quarterly loss in at least 20 years–after a write-down and increase in deferred revenue related to a Windows 8 upgrade promotion.
Remember the bad old days when Apple used to lose money and Microsoft was the golden child?
Don’t get cocky. It wasn’t that long ago. This industry can turn on a dime.
To be fair, they had a pretty massive write-down this quarter, which tanked their earnings.
We’ll see how they do over the next couple quarters. They’ve got some pretty big product launches upcoming.
goes both ways
it’s a non-cash event so it’s just accounting, but it is the single most tangible indictment of the decision-making and failure of Ballmer as CEO. His choices on direction and growth are charitably described as myopic.
To think that he and Microsoft was just a yes-from-Jerry-Yang away from a 3-comma, 11 digit disaster…
Normally you would say his days are numbered, but we are long past that point already…
I read, somewhere, their purchse of some company is what made them report a loss.
Not a purchase, but a write down of a previous purchase.
Yeah, that’s what I meant.
I wonder how many more write-downs are due because of poor purchase decisions made in the past?
What if Skype turns out to not be worth the $8b they paid for it? What if Yammer was a waste of $1.2b? What about that $300m Nook stake?
At the moment there’s value sitting on their balance sheet as a result of these acquisitions.
To be honest I don’t get the logic behind this reporting.
You are better on reporting this, Jim, but Gruber seems to pretend that a writeoff is a definitive loss.
This is basically just accounting. By writing something off you save money on taxes. Not all investments are profitable.
Yes, it’s “just accounting” but it means they paid a lot more for a company than it turned out to be worth. That’s a reflection of poor decision making.
Not technically true. If company purchases a vehicle, the depreciation of it will hit the accounting sheet at some point. The way they did it, it hit hard this quarter and it shows.
Take away that purchase and they are in the black.
To be fair, it must be noted that the write down is the end game of failed strategy carried out by the CEO. A CEO that flirted with purchasing Yahoo! for a (in hindsight) a ridiculously inflated sum. Microsoft’s twin cash cows make the management sloppy and over confident. What other seeds have been sown that will be seen by future analysts as the beginning of the end for Microsoft?