Microsoft has posted the results of the second quarter of its 2018 financial year, running up until December 31, 2017. Revenue was $28.9 billion, up 12 percent year-on-year, and operating income was $8.7 billion, a 10-percent increase. Net income was, however, a loss of $6.3 billion, with a loss per share of $0.82. The cause of this was a $13.8 billion tax bill courtesy of the Tax Cuts and Jobs Act (TCJA), signed into law by President Trump late last year. Absent that change, net income would have been $7.5 billion, up 20 percent year-on-year, with earnings per share similarly up 20 percent to $0.96.
The TCJA imposed one-time tax rates of 15.5 percent on foreign-held cash and cash equivalents and 8 percent on non-cash, as if that foreign money had been repatriated to the US and hence subject to US corporate income tax. Many firms with large foreign-held cash piles are going to be taking big tax hits this quarter as a result; Citibank claimed a $22 billion charge, and Apple is expected to take a hit as big as $38 billion.
Microsoft currently has three reporting segments: Productivity and Business Processes (covering Office, Exchange, SharePoint, Skype, and Dynamics), Intelligent Cloud (including Azure, Windows Server, SQL Server, Visual Studio, and Enterprise Services), and More Personal Computing (covering Windows, hardware, and Xbox, as well as search and advertising).
Source:: Arstechnica – Gadgets