Microsoft Corp (MSFT)
Earnings Release  FY12 Q4
Continued operating performance improvement*
Revenue up 10% Y/Y to $2.9 billion
Bing U.S. market share at 15.6%, up 120 basis points y/y
Adjusted operating loss improvement of approximately $730 million or 27%*
*Adjusted for goodwill impairment charge

Online advertising revenue grew $306 million or 13% to $2.6 billion, reflecting continued growth in search advertising revenue, offset in part by decreased display advertising revenue. Search revenue grew due to increased revenue per search, increased volumes reflecting general market growth, and share gains in the U.S. According to third-party sources, Bing organic U.S. market share for the month of June 2012 was approximately 16%, and grew 120 basis points year over year. Bing-powered U.S. market share, including Yahoo! properties, was approximately 26% for the month of June 2012, down 100 basis points year over year.

OSD’s fiscal year 2012 operating loss reflects a goodwill impairment charge of $6.2 billion, which we recorded as a result of our annual goodwill impairment test in the fourth quarter. The non-cash, non-tax-deductible charge related mainly to goodwill acquired through our 2007 acquisition of aQuantive, Inc. While the search business has been improving, our expectations for future growth and profitability for OSD are lower than our previous estimates. We do not expect this impairment charge to affect OSD’s ongoing business or financial performance.

Excluding the $6.2 billion goodwill impairment charge, OSD’s operating loss was reduced by higher revenue and lower sales and marketing expenses and cost of revenue. Sales and marketing expenses decreased $321 million or 29%, due mainly to lower marketing spend. Cost of revenue decreased $213 million, driven by lower Yahoo! reimbursement costs, amortization, and online operating costs.

Download Segment Information:Excel (27KB)
Online Services Division
RESULTS (in millions, except percentages)
2012 2011 Change
Revenue $ 2,867 $ 2,607 10%
Operating
Loss
$ (8,121) $ (2,657) *
* not meaningful
FY13 Earnings Release Schedule
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