Quantcast
Microsoft lost more money this quarter than Sony

Forums - Microsoft Discussion - Microsoft lost more money this quarter than Sony

Baalzamon said:
Landguy said:
Imaginedvl said:
First... it is a "write off" not a loss :)
And comparing Microsoft to Sony in any way on the financial stand point is literally comparing oranges and apples...


Agree with you.  Not sure how people could read the results and come to such innacurate conclusions as most have.  MS did not lose any $$$.  THey devlued an assett.  Simple as that.  3-4 years from now, they could do it again or value up parts of it in their reporting.  Nothing unusual about it.

Just to set the record straight for those here who clearly have no clue what writing off goodwill is. It most certainly IS a loss. Microsoft paid X billion dollars for Nokia, and a good portion of the acquisition went to the balance sheet account 'goodwill'. Now, Microsoft is saying that this balance sheet account, which they paid X billion dollars for, isn't actually worth X minus 7.4 billion dollars. In other words, $7.4 billion of money actually spent by Microsoft is worth absolutely nothing.

 

As a general rule, if you have no clue how GAAP accounting works (mandatory for SEC filings), you should probably avoid saying that a loss reported in GAAP isn't a true loss.

I appreciate your attempt to say exactly what I said with much more detail.  However, my point is exactly the same as yours.  MS devalued an asset.  Companies devalue large assets all the time in off peak quarters where they had otherwise quality results.  They do so to avoid scrutiny during other times.  Clearly, MS has decided to jettison the "husk" of the business that they bought from Nokia through layoffs and such.  But, what they bought and still have is an entrence into the smartphone hardware business and a retention of their presence in the mobile software biz.  Because those things can't be physically tracked, no value can be directly attributed to them.  The "husk" was thrown away and the cost wrote down.  The actual thing that they wanted they kept.  THe reason that the company's value is the same today as it was 2 weeks ago before the write down is that everyone knows what I just said.  They know that the husk had no real value.



It is near the end of the end....

Around the Network
Landguy said:
Baalzamon said:
Landguy said:
Imaginedvl said:
First... it is a "write off" not a loss :)
And comparing Microsoft to Sony in any way on the financial stand point is literally comparing oranges and apples...


Agree with you.  Not sure how people could read the results and come to such innacurate conclusions as most have.  MS did not lose any $$$.  THey devlued an assett.  Simple as that.  3-4 years from now, they could do it again or value up parts of it in their reporting.  Nothing unusual about it.

Just to set the record straight for those here who clearly have no clue what writing off goodwill is. It most certainly IS a loss. Microsoft paid X billion dollars for Nokia, and a good portion of the acquisition went to the balance sheet account 'goodwill'. Now, Microsoft is saying that this balance sheet account, which they paid X billion dollars for, isn't actually worth X minus 7.4 billion dollars. In other words, $7.4 billion of money actually spent by Microsoft is worth absolutely nothing.

 

As a general rule, if you have no clue how GAAP accounting works (mandatory for SEC filings), you should probably avoid saying that a loss reported in GAAP isn't a true loss.

I appreciate your attempt to say exactly what I said with much more detail.  However, my point is exactly the same as yours.  MS devalued an asset.  Companies devalue large assets all the time in off peak quarters where they had otherwise quality results.  They do so to avoid scrutiny during other times.  Clearly, MS has decided to jettison the "husk" of the business that they bought from Nokia through layoffs and such.  But, what they bought and still have is an entrence into the smartphone hardware business and a retention of their presence in the mobile software biz.  Because those things can't be physically tracked, no value can be directly attributed to them.  The "husk" was thrown away and the cost wrote down.  The actual thing that they wanted they kept.  THe reason that the company's value is the same today as it was 2 weeks ago before the write down is that everyone knows what I just said.  They know that the husk had no real value.

You seem to struggle with the idea that devaluing goodwill isn't losing money. Goodwill is exactly what you described. The customers and non physical portions of an acquisition that you deemed to be worth more than the company initially had on the books (hence why you paid more). Microsoft has now determined that these non physical assets are not worth nearly as much.

You can't just pull the number out of your ass...you would have to have extremely detailed calculations (most likely relating to expected future returns) to detail to the auditors why it is worth that much less. This number would most likely need to be within about $50 million to be materially correct for a company the size of Microsoft.

To just do it purely for offsetting a good quarter as you speak would likely be considered fraud. The reality is, the asset isn't worth what they initially thought it was (i.e. they lost money). Now, could they have probably justified doing this last quarter, or the quarter before? Sure, but these non physical assets that you say can't be valued most certainly can be.

Microsoft not losing a substantial amount of the share value most likely has a lot more to do with the fact that a lot of its value was likely on cash flows and income, which cash flows will still be fine this quarter, and income was still fine without the write off (which wont happen again next quarter).



Money can't buy happiness. Just video games, which make me happy.

Baalzamon said:
Landguy said:

I appreciate your attempt to say exactly what I said with much more detail.  However, my point is exactly the same as yours.  MS devalued an asset.  Companies devalue large assets all the time in off peak quarters where they had otherwise quality results.  They do so to avoid scrutiny during other times.  Clearly, MS has decided to jettison the "husk" of the business that they bought from Nokia through layoffs and such.  But, what they bought and still have is an entrence into the smartphone hardware business and a retention of their presence in the mobile software biz.  Because those things can't be physically tracked, no value can be directly attributed to them.  The "husk" was thrown away and the cost wrote down.  The actual thing that they wanted they kept.  THe reason that the company's value is the same today as it was 2 weeks ago before the write down is that everyone knows what I just said.  They know that the husk had no real value.

You seem to struggle with the idea that devaluing goodwill isn't losing money. Goodwill is exactly what you described. The customers and non physical portions of an acquisition that you deemed to be worth more than the company initially had on the books (hence why you paid more). Microsoft has now determined that these non physical assets are not worth nearly as much.

You can't just pull the number out of your ass...you would have to have extremely detailed calculations (most likely relating to expected future returns) to detail to the auditors why it is worth that much less. This number would most likely need to be within about $50 million to be materially correct for a company the size of Microsoft.

To just do it purely for offsetting a good quarter as you speak would likely be considered fraud. The reality is, the asset isn't worth what they initially thought it was (i.e. they lost money). Now, could they have probably justified doing this last quarter, or the quarter before? Sure, but these non physical assets that you say can't be valued most certainly can be.

Microsoft not losing a substantial amount of the share value most likely has a lot more to do with the fact that a lot of its value was likely on cash flows and income, which cash flows will still be fine this quarter, and income was still fine without the write off (which wont happen again next quarter).

We are still saying the same thing.  I guess I need to clarify one of my original comments.  The difference here is that MS wrote down the "today" value of this asset.  Knowing that if Win10 mobile and related products take off over time, the value will return.  MS moves assets and divisions left and right all the time to hide underperforming units.  If you think that is fraud, then you better not look to deep into the accounting of almost any company large or small.  Writing down the value of an asset does not cost them cash, only value.  They spent the cash last year, and it was spent or lost then. They can recover value later if or when the asset performs differently.  By changing the basis for the asset to a much lower number, it is easier for them to sell it or even show its greater value later as a gain.



It is near the end of the end....

so what you are saying taxwise Microsoft lost more money. But on the whole Sony did? Great victory there.



TheBlackNaruto said:
HollyGamer said:
But Bill Gates is still the second richest person on the world thou, so if anything happen to Microsoft then he will do something. While in other side of the world SONY and Japan is struggling with economy problem within their country. So SONY small gain is still cannot be compared to Microsoft loss because it will not affecting the whole idea of Video gaming Industry market.


What makes you think Bill gates is the 2nd reichest person in the WORLD???? Maybe in America...but the world...he is not even in the top 5 or 10 if I am not mistaken.

 

edit:

It seems I stand corrected...odd though the last time I checked his 80 billion was not at the top there were people with more. Looks like I will have to go find out what I was looking at.

 

Double Edit:

Okay so now I take it back looking at the Forbes list there are a lot of people/familes missing on that list like the Rothchild family...not a single memeber was on the list. And I thought that familys worth was over like 400 billion or something like that.

 

On Topic:

This thread just seems like it won't end well. MS is fine...that loss is nothing to them. But good for Sony.

you're way off base, Bill Gates is like #2 if not arguably really #1 in net worth on the planet. I believe he still has a good deal of Microsoft stock if I'm not mistaken too



Around the Network
mountaindewslave said:
TheBlackNaruto said:


What makes you think Bill gates is the 2nd reichest person in the WORLD???? Maybe in America...but the world...he is not even in the top 5 or 10 if I am not mistaken.

 

edit:

It seems I stand corrected...odd though the last time I checked his 80 billion was not at the top there were people with more. Looks like I will have to go find out what I was looking at.

 

Double Edit:

Okay so now I take it back looking at the Forbes list there are a lot of people/familes missing on that list like the Rothchild family...not a single memeber was on the list. And I thought that familys worth was over like 400 billion or something like that.

 

On Topic:

This thread just seems like it won't end well. MS is fine...that loss is nothing to them. But good for Sony.

you're way off base, Bill Gates is like #2 if not arguably really #1 in net worth on the planet. I believe he still has a good deal of Microsoft stock if I'm not mistaken too

I went and looked it up on Forbes he is still number one...then I went and looked at other families not mentioned like the Rothchild family that I mentioned and they are worth like 400 billion....so how He is number one is beyond me. But then youd did say "net worth" so I guess they are only using those people in which they can keep good track of their money.



The absence of evidence is NOT the evidence of absence...

PSN: StlUzumaki23

Sticky said:

Its because of a $7.6 billion dollar writedown in the nokia division though but still... lol.

 

Revenue was down 5.1% which is why the stock price fell.

Last quarter Sony had revenue growth of 3.6% YoY.

One year ago Sony's Q1 had an operating profit of 69.8 Billion yen, and it is safe to expect something similar this year. Stock today was up 1.25%. 

 

Just want to challenge the popular notion on here that Sony is constantly bleeding red ink and MSFT is invincible. You never know lol. 

 

 


and the funny stuff.
xbox sales are up YOY

playstation sales will be down YoY

 

 

also. next quarter microsoft will report profits of 4 - 6 billion dollar again. more than sony made in the last 5 years

just to put things into perspective ;)



endy.G said:
Sticky said:

Its because of a $7.6 billion dollar writedown in the nokia division though but still... lol.

 

Revenue was down 5.1% which is why the stock price fell.

Last quarter Sony had revenue growth of 3.6% YoY.

One year ago Sony's Q1 had an operating profit of 69.8 Billion yen, and it is safe to expect something similar this year. Stock today was up 1.25%. 

 

Just want to challenge the popular notion on here that Sony is constantly bleeding red ink and MSFT is invincible. You never know lol. 

 

 


and the funny stuff.
xbox sales are up YOY

playstation sales will be down YoY

 

 

also. next quarter microsoft will report profits of 4 - 6 billion dollar again. more than sony made in the last 5 years

just to put things into perspective ;)


im not talking about xbox im talking about ms

And playstation sales down Yoy still > xbox up yoy

and revenue will be up in the playstation division

 

the fact that MS has all that money makes it even more embarrassing that xbox sales are the way they are. Sony is literally doing the bare minimum (cost wise)



Sticky said:
endy.G said:

 

 


and the funny stuff.
xbox sales are up YOY

playstation sales will be down YoY

 

 

also. next quarter microsoft will report profits of 4 - 6 billion dollar again. more than sony made in the last 5 years

just to put things into perspective ;)


im not talking about xbox im talking about ms

And playstation sales down Yoy still > xbox up yoy

and revenue will be up in the playstation division

 

the fact that MS has all that money makes it even more embarrassing that xbox sales are the way they are. Sony is literally doing the bare minimum (cost wise)


yes. you just pick the points, where sony / playstation is better and ingnoring everything else

we know what kind of people, do this

 

and revene will probably be down, too this quarter for sonys gaming division
sony made 257,5 billion last year april - june
and maybe even a loss again, like last quarter



Good and I hope their stock drops low and I'll buy it up.







VGChartz♥♥♥♥♥FOREVER

Xbone... the new "N" word   Apparently I troll MS now | Evidence | Evidence