Microsoft Changes Earnings Reports; Takes $350 Million Charge
- By Scott Bekker
If announcing $350 million charges against profits promised
to have similar impacts on its stock position, Microsoft Corp. would probably
look forward to more charges.
After announcing a financial reorganization of its quarterly
earnings reports on Tuesday, Microsoft (www.microsoft.com)
also announced it will take a $350 million charge against profits this quarter
in order to comply with Rule 133 of the Financial Accounting Standards Board,
which outlines new reporting guidelines for all corporations. Such a charge might be expected to
discourage stock traders for a time, but less than two hours before the market
closed on Wednesday, Microsoft stocks were up more than a full point.
Microsoft’s quarterly reports will now feature five segments
rather than the four previously. They
will be broken down into Desktop Software and Services - Windows operating
systems and Microsoft Office; Enterprise Software and Services – Windows 2000
Server, SQL Server, Exchange Server, developer tools, consulting services, and product
support services; Consumer Software, Services, and Devices - MSN, WebTV,
learning and productivity software, embedded software, mobile and wireless, and
games; Consumer Commerce Investments - Expedia, Inc., HomeAdvisor online real
estate service, and CarPoint online automotive service, all companies Microsoft
has the dominant interest in; and Other - Press, keyboards, and mouse products.
The newly-segmented reports will debut with Microsoft’s
third-quarter report, due on Oct. 18. – Ted Williams
Scott Bekker is editor in chief of Redmond Channel Partner magazine.