Microsoft has picked an unfortunate time to become more open in its financial reporting, at least from the standpoint of Microsoft Business Solutions, because the MBS operating results are bathed in red. Microsoft began reporting division results, including those of MBS, in the first quarter ended September 30.
Competitors have whispered for some time that MBS, the umbrella for software marketed under the names of Great Plains, Solomon, Navision, and Axapta, could not possibly be turning a profit and they were right. MBS had $107 million in revenue for the first quarter, with operating losses of $68 million. Those results did not include a full three months of revenue from Navision. But don’t blame Navision for the red ink. A year earlier, MBS, then primarily Great Plains and Solomon, with a few million of bCentral, had $74 million and had a $39 million operating loss. It went 52.7 cents on every dollar of revenue to losing 63.6 cents on every buck. And in its last publicly related quarter ended Nov. 30, 2000, Great Plains had operating losses of just under $8 million on revenue of $75.5 million, or 10.5 cents on the dollar. It’s not an upward movement.
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