SEATTLE _ Microsoft reported a $6.3 billion loss in its second quarter, reflecting a huge charge stemming from last year's tax reform legislation. Without that charge, the results were better than analysts expected.
The Redmond company's fiscal second-quarter earnings reflect a $13.8 billion tax payment related to Microsoft profits held overseas. The software giant holds about $132.1 billion outside the U.S., the second largest amount of any U.S. corporation.
The new tax law gives companies an incentive to bring their substantial overseas holdings back to the U.S. by offering a one-time tax rate of 15.5 percent on overseas money, much lower than the previous 35 percent rate. Some of the overseas funds, those held in real estate and other physical properties, are taxed at an even lower 8 percent.
Microsoft did not immediately specify how much of its overseas money it would bring back to the U.S. The company will hold a conference call at 2:30 p.m. to discuss its quarterly earnings.
The company beat analysts' expectations for the second quarter, posting revenue of $28.9 billion, a 12 percent increase over the same period last year, and adjusted earnings per share _ not including the tax charge _ of 96 cents. Wall Street analysts expected Microsoft to earn 86 cents a share on revenue of $28.38 billion.
Without the big tax charge, Microsoft reported a profit of $7.5 billion, compared with a profit of $6.3 billion in last year's second quarter.
Revenue at Microsoft's Azure cloud computing division, a main focus for investors, grew 98 percent during the quarter. The company's commercial cloud _ which includes Azure, Office 365 and Dynamics 365 _ reported revenue of $5.3 billion during the quarter, a 56 percent increase.
Microsoft's biggest revenue generator of the quarter was once again its Windows, Xbox and PC businesses, a group it calls "more personal computing." That unit brought in $12.2 billion.
Microsoft's stock closed up more than 2 percent at $95.01 Wednesday before the results were released. The share price fell about 1.2 percent to $93.85 in after-hours trading after the results were posted.
