Microsoft posts first quarterly loss—ever

If you read through Microsoft’s latest earnings release, you’ll see the company gloat about record revenue for both its fourth fiscal quarter and its 2012 fiscal year (both of which ended on June 30). Indeed, Microsoft’s quarterly revenue climbed from $17.37 billion a year ago to $18.06 billion last quarter, and full-year revenue inched up from $69.94 billion to $73.72 billion.

The thing is, Microsoft also posted a $492 million net loss for the quarter—the first ever loss in Microsoft’s entire 26-year history as a publicly traded company, according to the Associated Press. The loss stems from a $6.19 billion write-off linked to Microsoft’s purchase of digital marketing firm aQuantive. Microsoft announced the accounting charge earlier this month, providing the following explanation:

Microsoft completed its acquisition of aQuantive on Aug. 13, 2007, in an all-cash transaction valued at just over $6.3 billion. While the aQuantive acquisition continues to provide tools for Microsoft’s online advertising efforts, the acquisition did not accelerate growth to the degree anticipated, contributing to the write down.

Despite the sizeable write-down, Microsoft’s balance sheet still shows net income of $16.98 billion for the firm’s full 2012 fiscal year. That’s down about 27% from the $23.15 billion the company posted for its 2011 fiscal year, but it’s still a pretty decent chunk of change.

The company’s various businesses all posted at least modest yearly growth, as well. The slowest growth was in the company’s Windows & Windows Live Division, which only grew by 3% for the full year, and the fastest growth was in its Server & Tools Business, which shot up 12%. "Enterprises are purchasing SQL Server and System Center to support their mission critical workloads and build their business intelligence and private cloud infrastructure," the company comments.

For the past quarter alone, the strongest growth (20%) was in the Entertainment and Devices Division, which is responsible for the Xbox and Skype. Microsoft actually experienced a 13% quarterly revenue decline in its Windows & Windows Live Division, though. Perhaps that reflects reduced demand for Windows 7 as we draw closer and closer to Windows 8’s release.

Comments closed
    • Shouefref
    • 7 years ago

    This might be an accounting trick to avoid having to pay too much taxes at the end of the year following the introduction of W8.
    MS is known for not paying its taxes.

      • internetsandman
      • 7 years ago

      A multi-billion dollar corporation trying to dodge any tax paying at all? Say it ain’t so!

      • sschaem
      • 7 years ago

      The trick is that they lost 6 billion of value… Nice trick.

    • ronch
    • 7 years ago

    I wonder if aQuantive is really worth 6.3 biggies. Could they be overpaying?

      • sweatshopking
      • 7 years ago

      yes. they just wrote it off. it was over paying. that’s why the wrote it off.

    • redavni
    • 7 years ago

    [url<]http://www.nytimes.com/2007/09/26/technology/26adco.html?ei=5090&en=009687e9ec9a4b97&ex=1348459200&adxnnl=1&partner=rssuserland&emc=rss&adxnnlx=1190801487-OOSuQHwaDz9Hhs3NSx8ddQ[/url<] What this is all about.

    • blastdoor
    • 7 years ago

    This loss has nothing to do with windows or office and everything to do with microsofts failed attempts to compete with google in search/advertising.

    The lesson for Microsoft ought to be that they cannot buy their way into markets that are dominated by companies that are just as big and smart as MS is.

    • jdaven
    • 7 years ago

    “Despite the sizeable write-down, Microsoft’s balance sheet still shows net income of $16.98 billion for the firm’s full 2012 fiscal year. That’s down about 27% from the $23.15 billion the company posted for its 2011 fiscal year, but it’s still a pretty decent chunk of change.”

    This is the most important part of the whole earnings report. Quarterly variation is going to happen but yearly drops in revenue can mean significant trends are afoot.

    • Krogoth
    • 7 years ago

    Another symptom that the traditional PC market is shrinking and has been fully saturated.

    Kiddy Gamer is either getting gaming consoles or downloading latest social networking game on their portable device.

    Mainstream crowd aren’t buying desktops and even laptops. They are getting portables and guess who is the biggest seller in this? Apple.

    Apple has been making record quarterly revenue in last few years.

    It is really no big surprise at all.

    That’s why Microsoft is trying so hard to break Apple’s stronghold in the portable market. They are also feeling the heat from Google on the office suite front. Office 13 makes it painfully obvious.

    Enterprise market is only crowd getting 7 licenses by the bulk and will be for some time, while they wait to see how Windows 8 will play out.

      • Meadows
      • 7 years ago

      It’s a one-time writeoff, you blind idiot.

        • Krogoth
        • 7 years ago

        Care to explain why Intel and AMD are also reporting significant shortfall in quarter revenues as well?

          • plasticplate
          • 7 years ago

          Care to explain where intel reported significant shortfall? How is revenue of 13.5b and operating profit of around 4b in a quarter (q2 2012) a significant shortfall? Compare it to year over and its actually a growth. Why don’t you do some research before posting some dumb and misguided statements online?

            • sweatshopking
            • 7 years ago

            POSTING ONLINE IS SERIOUS BUSINESS

        • sschaem
        • 7 years ago

        Do you know what is behind this one time write off?

        Do you think because they write off 6+ billion of loss the problem is now all gone?

        aQuantive is related to their online business, can you say Bing? bada bong…. with a loss of .5 billion this quarter.

        So OK MS just said “We messed up with aQuantive , and we lost 6 billion of net worth… but our online business is fixed and its all great” … Nope. The write off is because their online effort is falling on its face.
        The problem is still here, one time 6+billion write off or not.

        At this stage MS doesn’t have new market share to gain, just more market share to loose.
        I wouldn’t be surprise that MS need to shrink, maybe even very rapidly in the next 5 years.

      • destroy.all.monsters
      • 7 years ago

      “Mainstream crowd aren’t buying desktops and even laptops. They are getting portables and guess who is the biggest seller in this? Apple. ”

      Also untrue. You should just wipe this whole post.

        • Krogoth
        • 7 years ago

        I guess those earlier supply issues with iPads and Apple’s recent quartely record growth is just smoke and mirrors?

          • destroy.all.monsters
          • 7 years ago

          “Mainstream crowd aren’t buying desktops and even laptops.” How do supply issues tie into this? Do you have any credible proof that people are ditching their laptops and desktops en masse? Because there’s been no evidence I’ve seen of this – anywhere. We are talking ancillary devices – not replacements.

          Please keep in mind I’m not hammering you for your name or any other reason. I have no dart board with you on it – but this is a set of grandiose statements where the facts aren’t in evidence.

          Which is not to say that you couldn’t consider them gateway drugs for control of the desktop – but that’s not what you said – you’re saying the desktop is irrelevant and you’re wrong. Different tools for different jobs. Furthermore this write off was for an ignorant purchase in the hopes that they could overcome Google at their own game. That worked out well. I’m sure copying Apple will really win them points across the board as well…

            • End User
            • 7 years ago

            Growth is not happening in the Windows space. The smartphone and tablet markets (and to a lesser extent Macs) are the ones that are stealing the growth away from Windows.

            Apple alone is making a major dent [url<]http://goo.gl/h7mX2[/url<] Add Android to the mix and the numbers would be even more striking.

            • destroy.all.monsters
            • 7 years ago

            Growth in new markets != the extinguishing of those existing markets. Nor does it support Krogoth’s assumptions.

            The desktop and laptop are hardly irrelevant. Next time you’re doing some FPS gaming, CAD/CAM, 3D modeling, photoshopping ad nauseum- *on a phone or tablet* then you can feel free to make a comment of this nature. Currently they’re fun toys that have some fairly minimal productivity attached to them. Writing anything more than a memo is not something people are dying to do on a tablet. I can’t imagine doing spreadsheets is very intuitive either.

            You haven’t disproved that these are adjuncts to desktops and laptops. No one, least of all me, is claiming there isn’t a market there.

            Correlation is not causation. When the desktop is dead – or actually in a real way dying you and Krogoth might have a point. However that day is years away – if ever.

            • End User
            • 7 years ago

            [quote<]When the desktop is dead - or actually in a real way dying you and Krogoth might have a point. However that day is years away - if ever.[/quote<] I said nothing about the desktop being dead. Market growth for desktops running Windows in the computing space is dead. Todays reality is that the vast majority of computing devices sold will be tablets and laptops. In addition a large and ever increasing % of these devices will not be running an OS from Microsoft.

    • tfp
    • 7 years ago

    It’s a write off so there is no impact to the companies cash position or really cash flow for Q2. They were still able to put a boat load of cash in the bank. Equity writing down on a highly profitable company, eh whatever.

    The market is having the same reaction so far.
    [url<]http://www.google.com/finance?client=ob&q=NASDAQ:MSFT[/url<]

      • BobbinThreadbare
      • 7 years ago

      The write off means previously they spend 6 billion dollars and didn’t get anything for it. So it’s not really a whatever.

        • Geistbar
        • 7 years ago

        That’s very true, but I think “whatever” is much more accurate an interpretation than “Microsoft’s business is failing”, with the latter being the way many others appear to be taking it. It just means they made a poor investment, not that their core businesses are in any trouble (at least not currently).

          • tfp
          • 7 years ago

          Basically this has already been factored into the share price because of the performance of that component over the last X years. All this ends up doing is helping MSFT on taxes at the end of the year.

            • Arag0n
            • 7 years ago

            Yeah, they have a “Fake loss” so they have less income taxes at the end of the year. Funny to see so many people saying that “they saw it coming with the grow of google and apple…”.

            Microsoft had the best Q2 ever and yearly revenue is the highest ever…. yeah, Microsoft is dying, of course…

            • sschaem
            • 7 years ago

            Yes. the write off is just a confirmation that MS online effort is failing. (that Bing .5 billion loss this quarter is another clear confirmation)

            MS share are falling, I’m guessing, because people see a company that is just struggling to keep its market share.

    • BobbinThreadbare
    • 7 years ago

    A 6 billion dollar write off for growth not being accelerated as much as anticipated? Holy cow, not even AMD would have such a weak excuse.

      • just brew it!
      • 7 years ago

      What, you mean like their [url=http://www.internetnews.com/ent-news/article.php/3722521/ATI+WriteDown+Costs+AMD+168+Billion.htm<]1.68 billion ATI write off[/url<]? Given that they are a much smaller company, that's a lot bigger in relative terms.

        • BobbinThreadbare
        • 7 years ago

        Yeah, I don’t see Ruiz claiming it’s because ATI failed to accelerate growth.

          • just brew it!
          • 7 years ago

          Well… according to their SEC filing from back then, the write down was because “the current carrying value of its goodwill which the Company had recorded as a result of its October 2006 acquisition of ATI Technologies Inc. was impaired”.

          Cutting through the legalese, this basically says “we screwed up and paid way too much”. I don’t see how that’s really any better than “failed to accelerate growth”…

            • BobbinThreadbare
            • 7 years ago

            It just sounds like a weak excuse to me. /shrug

    • lilbuddhaman
    • 7 years ago

    6.9 billion for some colorful squares ?

      • glacius555
      • 7 years ago

      Those colorful squares may result in additional colored zeros in their future earnings.

        • grantmeaname
        • 7 years ago

        I see what you did there, and I liked it.

        • lilbuddhaman
        • 7 years ago

        There is something wrong with the world when marketing departments get higher budgets than every other department.

        🙁

    • adisor19
    • 7 years ago

    Times are changing. I think WIndows 8 will be the biggest test for Microsoft : do they still have the same influence they had back in the day or will the consumer be less accepting of the Microsoft way ?

    If Windows 8 flops, i call game over for MS in the consumer market. The time is more than ripe for a challenger to step up. Only a few more months to wait 🙂

    Adi

      • chuckula
      • 7 years ago

      Yeah Adi, if Mac OS 9 or the G4 Cube flop then I call it game over for Apple in the consumer industry. Oh wait..

        • adisor19
        • 7 years ago

        Last i checked, Mac OS 9 didn’t flop and the G4 cube was just a computer, not an OS. Now if OS X flopped, your point would have been more than valid 🙂

        Adi

          • derFunkenstein
          • 7 years ago

          If OS X flopped, there’d be no Apple. Not just no consumer products, but no Apple.

            • adisor19
            • 7 years ago

            Agreed. Microsoft is not in the same position where Apple was at that time hence my argument that they might loose quite a bit of market share if windows 8 flops with consumers. MS will not cease to exist.

            Adi

          • plasticplate
          • 7 years ago

          Who cares about OSX? Its just a minute chunk of apple’s business. I mean, OSX is doing pretty good right now and has what…around 10% global share. Even if Win8 is not a success for MS, its not game over. Windows is too firmly entrenched. If people dont like it they will stick with Win7 and use it till the next time MS comes out with a version of Windows they like. Its not like they are going to switch to OSX just because they dont like Win8.

            • blastdoor
            • 7 years ago

            Two reasons:

            1. If OSX had flopped, apple would have gone out of business before the iDevices took off.

            2. IOS is essentially OSX for mobile devices. No OSX, no iOS, no iPhone, no iPad, no apple

            • sweatshopking
            • 7 years ago

            not 10%
            [quote<] In August 2011, Gartner estimated Apple's PC market share in US as 10.7% for Q2 2011. Apple's worldwide market share is not listed, because it is not in the list of top 5 computer manufacturers, and is inferred to be 5% or lower. Gartner's numbers include netbooks, but not media tablets such as the iPad. Total units in Q2 2011 from all vendors, ~85 million.[4] "A Gartner forecast calls for Mac OS to ship on 4.5 percent of new PCs worldwide in 2011 and 5.2 percent in 2012. Gartner does not expect Google Chrome OS, Google Android or HP's webOS to get 'any significant market share' on PCs in the next few years, and expects Linux operating systems to remain at less than 2 percent share over the next several years."[5] Analyst Charlie Wolf of Needham & Co. has stated that in 2011 Apple broke 5% of global desktop market share for the first time.[6] Net Applications has estimated global desktop market share of Windows 92.2%, Apple 6.36%, Linux 1.41%. [/quote<] this is osx, not including iOS

      • superjawes
      • 7 years ago

      You know, Vista wasn’t well received, yet Microsoft survived. And with Windows 8 focusing on tablets and mobile platforms, they don’t need a lot of adoption on desktops to have it be a success. Carving even a small bit of the mobile markets would allow them to remain relevant there, and then they can keep hold of their desktop market as long as Windows 9 appeals to enough desktop users.

        • adisor19
        • 7 years ago

        Windows 9 is far faaaaaaaaaaar away. I doubt MS can wait that long and not loose a lot of share in the consumer market.

        Adi

          • ludi
          • 7 years ago

          Windows 8 is an all-in, win or lose type of play. If Microsoft can’t break into the mobile device space they’re a whole lot less relevant in the next ten years, regardless.

          They’ve always made their Big Money in the corporate market. Bringing tablets, which are already popular, into the Office/Windows ecosystem is their best possible shot at making the transition. I don’t like the Metro interface as a desktop GUI either, but you’ve got to give Microsoft credit for recognizing the direction of the industry and actually throwing an entire product generation into one big effort.

            • superjawes
            • 7 years ago

            If they get some headway in the tablet market they will be fine. If people don’t cozy up to Metro on desktops, the OS will still be engineered to work well across both platforms, meaning they only need to tweak the interface(s) to appease people on the next OS cycle.

            • destroy.all.monsters
            • 7 years ago

            It seems to me that people (primarily MS and its boosters) don’t get that it doesn’t work on the desktop and that no one cares about their phones. Even if it ends up being a fantastic tablet OS I don’t think it’s going to matter because there is no compelling reason to use it – and who will evangelize something that doesn’t work properly across all the platforms.

            Not that the idea of having a single code base – or even the same OS isn’t sound. Further I don’t see how aping another manufacturer’s niche helps you achieve your own. Windows users are different from Mac users – by telling PC users that Apple had it right all along you’re abandoning your own user base for one that hasn’t been shown to exist.

            Even marketing to corporations the argument is “look it’s all the same, easier to manage” the IT department and users will say “it sucks – I’d rather use my iphone/ipad/android anything”. If anything I think their push will actually aid Apple into breaking into the corporate world in a much bigger way.

            tldr version – fighting against entrenched opposition using their own methods and tactics is generally a poor idea.

            Edited for clarity.

          • superjawes
          • 7 years ago

          FAAAAAAAAAAAAAAAAAAAAAAAR? I’m guessing, if they keep the schedule they’ve had, we’ll se it in/around 2015-16. And if people don’t buy into Windows 8 for desktops, that does not mean that they will abandon Windows altogether. Windows 7 will likely continue to be available for people who want to buy it specifically. Microsoft would be stupid to make people choose between Windows 8 and something else.

          Again, look to the Vista transition. Businesses stuck with XP until Windows 7 came along…I don’t remember anyone flocking to OS X just because Vista became available.

            • Deanjo
            • 7 years ago

            [quote<].I don't remember anyone flocking to OS X just because Vista became available.[/quote<] FYI, the number of "switchers" hit their highest rate exactly when Vista did come out.

            • superjawes
            • 7 years ago

            Maybe, but a highest rate of 8 people isn’t that impressive 😛

            My point was that the market share didn’t suddenlly roll over to something else. Adi suggested that Windows could [lose] a lot of market share between now and Windows 9, but even with the animosity toward Vista, Microsoft never really lost market share, and certainly not market position.

            • sweatshopking
            • 7 years ago

            don’t use facts to obscure your position.

            • BobbinThreadbare
            • 7 years ago

            Go to any college campus and tell me that Microsoft has not lost market position.

            • superjawes
            • 7 years ago

            1. Student computers (laptops) are still fairly new, even with respect to comupters in general.
            2. Faculty and lab machines are running Windows. How’s that supposed to show that they lost market position?

            • Washer
            • 7 years ago

            1) Which is exactly why Microsoft should be scared. Those students are now Mac users, they will tend to buy Macs going forward. I would say college students are those most responsible for Apple’s success in the last decade. Students are the ones that set trends, be it fashion, music, etc or technology in this case.

            2) Schools, of all ranges, have traditionally been one of Apple’s strong points.

            • superjawes
            • 7 years ago

            1. Until they get into the real world and end up using PCs anyway…MS was also smart in doing home-use licensing, and with Dell and HP offerings for discounted home systems, families still end up with Windows machines more often than Macs. And even then, the balance might be off compared to “the real world,” but Windows is still strong on college campuses because more affordable options are available. Macs might have a larger share in this niche, but they don’t have a near-monopoly like Windows does in the business sector (and homes, and engineering, and POS machines…).

            2. Schools, as I mentioned, are using Windows, not OSX. Maybe in the past they have done well, and maybe music people are still sold, but having several computer labs, all with 20+ [b<]Windows[/b<] machines each, leans greatly in favor of Windows.

            • Washer
            • 7 years ago

            So, your argument is that because Microsoft has a monopoly they will always have a monopoly? Good one…

            • superjawes
            • 7 years ago

            No, I’m saying that Mac having a strong market share among college freshman is a fluke, and not indicative of an evolving landscape. The tablet phenomenon is a different story, but that’s exactly why we’re looking at a version of Windows focusing on the tablet market. The success or failure of Windows 8 will have long-lasting effects on all operating systems (mobile, tablet, desktop).

            But again, going back to the statement about MS losing market share of PCs, they really haven’t.

            • BobbinThreadbare
            • 7 years ago

            “But again, going back to the statement about MS losing market share of PCs, they really haven’t.”

            Apple has tripled their market share of PCs since 2007 according to [url<]http://www.netmarketshare.com/operating-system-market-share.aspx?qprid=10.[/url<] Now yes, this is going from 2% to 6%, but at some point Apple is going to achieve a critical mass.

            • sweatshopking
            • 7 years ago

            you’re right, they do have a ton of macs. i see them all the time at my wife’s university. thing is though, they’re all running windows. even if you buy a mac, you still need MS software to do real work. just means it’s a retail license, rather than an OEM.

            • Washer
            • 7 years ago

            The only Microsoft software students need is Office and Microsoft has been happy to sell it (or those kids are more than happy to pirate and share it).

            • sweatshopking
            • 7 years ago

            depends what program they’re taking. all the science nerd software is windows only, and if they want to do their science, need a windows OS to install it on.

            and i’m sure most of them are pirated.

            • destroy.all.monsters
            • 7 years ago

            Not for long – MS already announced the new version of Office won’t run on Mac and that they won’t be updating their Mac software just bugfixing it.

            • plasticplate
            • 7 years ago

            Which college do u go to? Unless it is an all arts school windows still dominates.

            • End User
            • 7 years ago

            Factor in tablets and mobile phones and you will clearly see how much market share Microsoft has lost.

            • superjawes
            • 7 years ago

            That’s only lost market share if you count every tablet and mobile phone as a PC, which most people don’t. They might be “eseentially the same” at some point in the future, but right now, there are some pretty steep walls between them, which is the entire point behind Windows 8 (to break down those walls).

            Even if they fail in the tablet and phone markets, Microsoft will probably stay strong in the desktop and desktop-replacement laptop markets.

            • cynan
            • 7 years ago

            Um.. Microsoft never really had any market share (to speak of) in tablets or mobile phones. You can’t lose something you didn’t have to begin with.

            • End User
            • 7 years ago

            5 years ago Wintel had a lock on the personal computing market. That is no longer the case. Wintel lost market share simply because the market grew beyond them.

          • sweatshopking
          • 7 years ago

          lose*

          • moog
          • 7 years ago

          No. Win9 is being released sooner than you think…

        • FuturePastNow
        • 7 years ago

        You’re making a major assumption, that Microsoft will learn a lesson from Windows 8 and not double down on Metro in Windows 9.

        If Ballmer and Sinofsky are still in charge three years from now, I think it’s likely that Win9 will make Metro even more annoying.

          • superjawes
          • 7 years ago

          Microsoft has made mistakes in the past…yet they have survived just fine, and this article mentiones their first quarterly loss [b<]ever[/b<]. We're not talking about a bunch of morons here. Win8 is clearly focusing on tablets. If MS gets a strong share (like >33-50%), then yeah, they might double down, but then it wouldn't necessarily matter because they will have secured themselves in a growth market (sucks for desktop users, but we're talking business strategy). However, I'm not really making an assumption if Win8 flops in the tablet market. If MS has less than 10% of mobile devices at that point, it will be clear that they aren't going to be able to topple Apple or Google (at least not in a timely manner). At that point, they will focus on maintaining the businesses units that they already have, and that means keeping "conventional" PC market (and probably Xbox). We can't predict whether they will keep those markets, but these are smart business people. They aren't going to lose them without a fight.

          • sunner
          • 7 years ago

          “……..If Ballmer and Sinofsky are still in charge three years from now, I think it’s likely that Win9 will make Metro even more annoying….”

          FuturePastNow, cheer up.
          Imo, If Win8 flops, Ballmer&crew will be sacked by M/S Board of Directors.
          He wont be making mischief in “Win9”—he’ll be driving a garbage truck.

            • FuturePastNow
            • 7 years ago

            I don’t know. I usually get pretty heavy negative votes here when I suggest that Sinofsky might be unemployed in a couple of years.

      • BobbinThreadbare
      • 7 years ago

      Depends what you mean by consumer market. I expect the Xbox division to grow a lot.

      • cegras
      • 7 years ago

      Vista flopped, people stayed with XP for close to a decade then jumped to Windows 7 at an incredible rate.

        • Ari Atari
        • 7 years ago

        True, but they really fixed things with windows 7. I was really considering Linux for a lot of Vista’s life. If Microsoft failed with Windows 7, they’d lose me forever. If they fail for too long and someone else arrives with something comparable, I’m sure I wouldn’t be the only one jumping ship.

    • Anarchist
    • 7 years ago

    if I buy a whole chicken, eat it, can I still deduct the purchase price from my tax because I no longer have it?

      • codedivine
      • 7 years ago

      No cause you got the value out of the chicken. If it turned out to be a spoiled chicken, then perhaps.

      • ludi
      • 7 years ago

      Tell ya what…if you can really eat a whole chicken, I’ll buy it for you.

      However, this is going to be like one of those 15-pound pizza deals — all or nothing. If I find even one errant feather left behind, the deal’s off.

        • sweatshopking
        • 7 years ago

        you cant eat a whole chicken? i can EASILY eat two large chickens, most of a turkey, at least a large pizza. are you secretly a girl? i’ve solo’d a team platter of 80 chicken wings, and im only 240lbs.

          • sunner
          • 7 years ago

          “…..you cant eat a whole chicken? i can EASILY eat two large chickens, most of a turkey, at least a large pizza…..”

          Yeah, but if you keep eating like that—–he’ll be still posting here at TR, after you’ve died a horrible premature death.

            • sweatshopking
            • 7 years ago

            i don’t eat like that. if i did, i’d be 340, not just an obese 240. i CAN eat like that.

          • ludi
          • 7 years ago

          Not really, no. The crop and beak tend to get stuck in my throat, and don’t even get me started about the indigestion one of those thigh bones will cause.

            • sweatshopking
            • 7 years ago

            oh man. besides the feathers, it’s all good eating.

      • mcnabney
      • 7 years ago

      Well, to use that analogy – you already moved $7 in value from eating the chicken over to the operational side from the capital side. The problem is that you have to write-down the other $6B that you overpaid for that chicken. That is the reason for the write-down. MS grossly overpaid for something that they ended up having little use for.

        • Anarchist
        • 7 years ago

        you are wrong. The write down impact their earnings this quarter but it will come back for next years earnings as tax credit to pad their earnings. The write down is nothing more than a near criminal accounting gimmick.

          • BobbinThreadbare
          • 7 years ago

          A credit or a deduction?

          I’m guessing a deduction, which is nice, but is hardly a credit.

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