MicroStrategy's Bottom Line

MicroStrategy's latest earnings report gives new meaning to the term "bottom line."

How much money a company made or lost -- typically the bottom line on an income statement -- is often considered the most important fact in a quarterly earnings report. As a result, it commonly dominates the headlines on press releases and news stories.

MicroStrategy saved that information for the 35th line of a news release Friday announcing its second quarter results. The McLean-based software company's profit declined by 29.9 percent in the quarter that ended June 30, to $11.6 million from $16.6 million in the corresponding period a year earlier.

The announcement triggered a 13.5 percent plunge in MicroStrategy's stock price, which hit a new 52-week low of $74.07.

In the MicroStrategy news release, the profit numbers appeared at the end of the fifth paragraph, just after a reference to the somewhat more obscure "valuation allowances on certain foreign deferred tax assets."

The headline on the release touted the news that revenue -- the amount of money the company took in before subtracting expenses -- rose by 14 percent.

MicroStrategy has a habit of leading its releases with revenue numbers, but profit and loss figures move around. For example, in January, when the company reported the results for the fourth quarter of 2006, a 19 percent increase in profit appeared in the second paragraph of the release.

A MicroStrategy spokeswoman did not return a call seeking comment.

---David Hilzenrath

By Dan Beyers  |  July 27, 2007; 5:40 PM ET  | Category:  Microstrategy
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