Microsoft was once a dominating computer software giant that wasn’t to be messed with. Ever since the company went public in 1986, this monster of a company has been reporting positive gains. In recent years however, things have been looking increasingly slow for them, and today at it’s quarterly earnings, it had a little bit of bad news to share. A loss.
Most of the loss can be attributed to a failed acquisition of an advertising company named aQuantive in 2007, which has left them with a large write down. The company today announced a $492 million net loss due to it’s operating income being slashed by a $6.2 Billion write down. Almost the entire $6.3 Billion was written off.
Microsoft has also been continuously brought down by their continuing ability to capitalize on the advertising-based web with Bing. Bing, as many of you, but sadly not all of you, will know as Microsoft’s attempt to compete with Google and Yahoo in search.
Microsoft CEO Steve Ballmer did try to focus on their revenue in the press release, stating that they delivered exceptional fourth quarter earnings last year, and are in one of the biggest release years ever.“We delivered record fourth quarter and annual revenue, and we’re fast approaching the most exciting launch season in Microsoft history.”
Microsoft recorded revenue to the amount of $73.7 billion for the fiscal year that just ended, and $18 billion for the latest quarter, which is actually up 4 to 5 percent from year-earlier levels. The results were received positively by Wall Street, as the earnings numbers were actually larger than they originally thought. Microsoft (MSFT) rose more than 2% in post-market trading today, after closing at $30.67 per share.
Most of the company’s positive earnings can be attributed to new releases of Microsoft Office, server tools, and devices in their entertainment lineup, including Microsoft Xbox.
Another issue Microsoft has been dealing with since 2007 is the huge shift into the mobile realm. They failed to anticipate a fierce competing product that would revolutionize an entire industry, the iPhone. In missing the ball on the mobile market, Microsoft’s mobile line up has been essentially dwarfed by the increasingly powerful iOS and Android mobile platforms. While some investors are relatively optimistic about the future of the software giant’s mobile product lineup, some are also quite cautious. They have every right to be.
A touch-friendly tablet version of Windows 8 and Office 15 are likely to have a success story to tell, as both are the most powerful new releases in the works for Microsoft. However, the success of these two products in relation to the rest of the market is yet to be seen, and many investors understand that the positive outlook of both products is not something that anyone should take for granted.
(via Yahoo Finance)
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