Microsoft profits take a beating in spite of record fourth quarter
Microsoft's fourth quarter of its 2012 financial year was a mixed bag. Revenue is up to $18.06 billion, up 4 percent year-on-year. However, operating income is down 97 percent to just $192 million, and the company reported a $0.06 loss per share.
Microsoft attributes the results to two things. The company has written off $6.2 billion of goodwill value in the fallout of its 2007 purchase of advertising company aQuantive.
In addition, a further $540 million of revenue (and $540 of operating income) is deferred until next quarter, as the revenue is tied in to the Windows 8 Upgrade program (the company can only book the revenue when it fulfills the promised upgrades). The same behavior was seen in the run-up to the releases of Windows 7 and Office 2010, and is a recurring pattern for Microsoft. The deferrals will continue to accumulate until at least the second quarter of Microsoft's 2013 financial year, as that is when Windows 8 will become available. Microsoft expects to defer $1.0-$1.2 billion in revenue next quarter.