Microsoft Q4 2012 Results: Company Says Net Loss Of $492M Recorded Due To $6.19B aQuantive Writedown

Microsoft Thursday announced its financial results for the fiscal quarter ending June 30, 2012, and for the first time since it went public in 1986, the company posted a net loss of $492 million despite posting record revenue of $18.06 billion.

The Redmond company confronted the loss due to the writedown it took because of its failed aQuantive acquisition, an advertising business Microsoft acquired in 2007 in an effort to catch up with Google's ad business.

The financial results reflect the previously announced non-cash, non-tax-deductible income statement charge of $6.19 billion for the impairment of goodwill and the deferral of $540 million of revenue related to the Windows Upgrade Offer, Microsoft said in a statement.

The company said earlier this month that the goodwill in the Online Services Division was substantially the result of the 2007 acquisition of aQuantive. As a result of its 2012 impairment review, Microsoft has determined that a write down of its Online Services Division goodwill of approximately $6.2 billion is required.

Microsoft completed the acquisition of aQuantive in an all-cash transaction valued at over $6.3 billion, only to see rival Google expand its share of the online ad market, AP reported.

The impressive $18.06 billion revenue for the April-June quarter represents an increase of 7 percent from $17.37 billion in Q4 2011. It was also up from $17.41 billion in the last quarter.

Company's Entertainment and Devices Division that includes the Xbox 360 recorded the highest growth with revenue for the quarter increasing 20 percent (8 percent for the full year) to over $1.7 billion.

The Microsoft Business Division posted a 7 percent increase (7 percent for the full year), accounting for almost $6.3 billion in revenue. On the other hand, the Windows & Windows Live Division revenue declined 13 percent for the fourth quarter (3 percent for the full year). However, as The Verge noted, it still accounted for a still more-than-healthy $4.1 billion.

When it comes to the Server & Tools, the division grew 13 percent for the fourth quarter (12 percent for the full year), accounting for $5.09 billion in revenue. The Online Services Division grew 8 percent for the same quarter (10 percent for the full year) to $0.74 billion in revenue.

For the full fiscal year, Microsoft recorded revenue, operating income and earnings per share of $73.72 billion, $21.76 billion, and $2.00 per share respectively.

Adjusting for the goodwill impairment charge (i.e. the aQuantive writedown) and deferred revenue, Microsoft said that non-GAAP fiscal year 2012 revenue, operating income and earnings per share were $74.26 billion, $28.50 billion and $2.78 per share, representing increases of 6 percent, 5 percent and 5 percent respectively over adjusted non-GAAP fiscal year 2011 figures.

We delivered record fourth quarter and annual revenue, and we're fast approaching the most exciting launch season in Microsoft history, said Steve Ballmer, chief executive officer of Microsoft. Over the coming year, we'll release the next versions of Windows, Office, Windows Server, Windows Phone, and many other products and services that will drive our business forward and provide unprecedented opportunity to our customers and partners.

Meanwhile, Google reported a stronger-than-expected second quarter as profit rose 11 percent and revenue increased by 39 percent from the same period last year. The search giant reported a $2.79-billion profit on revenue of $9.61 billion. However, it too had its issues as the price paid for its internet search advertising continued to fall, down 16 percent from the same quarter a year ago, the Guardian reported.