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Weak quarters for Microsoft and Google

It was not an easy quarter for Microsoft and Google. The two giant companies both presented their results for the quarter ending Sept. 30.

The acquisition of Motorola Mobility pushed down Google’s results, since Motorola Mobility posted an operating loss of $527 million in its third quarter. As for Microsoft, the company reported revenue of U.S.$16.008 billion for the first fiscal 2013 quarter, down 7.9% from $17.372 billion in the same quarter last year. Microsoft’s net income was $4.5 billion, which is less than $5.7 billion from a year earlier.

Leaked earlier than expected, Google’s results (check full report) were disappointing but not surprising given the increased competition in the smartphone market, especially from Samsung and Apple, as noted by Julien Blin, directing analyst for consumer electronics and mobile broadband at Infonetics Research.

Trading in Google shares was suspended for two-and-a-half hours after the Internet giant released its third-quarter results early by mistake. As result, Google shares tumbled, eventually closing at $695, down 8%.

Google’s net income fell 20% in the third quarter. GAAP net income in the third quarter of 2012 was $2.18 billion, compared to $2.73 billion in the third quarter of 2011. The results were weighed down by the recent acquisition of Motorola Mobility, which posted an operating loss of $527 million for the period ($505 million for the mobile segment and $22 million for the home segment).

In a statement, Google CEO Larry Page said the company “had a strong quarter. Revenue was up 45% year-on-year, and at just fourteen years old, we cleared our first U.S. $14.10 billion revenue quarter,” he said.

As for Microsoft, the company said the financial results (check full document here) reflect the deferral of $1.36 billion of revenue and $0.13 of diluted earnings per share, due to the Windows Upgrade Offer, pre-sales of Windows 8 to OEMs prior to general availability, and the Office Offer.

“The launch of Windows 8 is the beginning of a new era at Microsoft,” said Steve Ballmer, chief executive officer at Microsoft, in a statement. “Investments we’ve made over a number of years are now coming together to create a future of exceptional devices and services, with tremendous opportunity for our customers, developers and partners.”

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Roberta Prescott
Roberta Prescott
Editor, [email protected] Roberta Prescott is responsible for Latin America reporting news and analysis, interviewing key stakeholders. Roberta has worked as an IT and telecommunication journalist since March 2005, when she started as a reporter with InformationWeek Brasil magazine and its website IT Web. In July 2006, Prescott was promoted to be the editor-in-chief, and, beyond the magazine and website, was in charge for all ICT products, such as IT events and CIO awards. In mid-2010, she was promoted to the position of executive editor, with responsibility for all the editorial products and content of IT Mídia. Prescott has worked as a journalist since 1998 and has three journalism prizes. In 2009, she won, along with InformationWeek Brasil team, the press prize 11th Prêmio Imprensa Embratel. In 2008, she won the 7th Unisys Journalism Prize and in 2006 was the editor-in-chief when InformationWeek Brasil won the 20th media award Prêmio Veículos de Comunicação. She graduated in Journalism by the Pontifícia Universidade Católica de Campinas, has done specialization in journalism at the Universidad de Navarra (Spain, 2003) and Master in Journalism at IICS – Universidad de Navarra (Brazil, 2010) and MBA – Executive Education at the Getulio Vargas Foundation.

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