Microsoft stock tanks on weak quarterly results

NEW YORK — Microsoft stock took a big hit on Friday after the Redmond-based software giant reported disappointing results for the latest quarter. The stock fell the most in more than a decade after the company on Thursday wrote off nearly $1 billion for expected losses on its new tablet and reported declining revenue for its Windows operating system..

Friday the price of shares was down 11.4 percent from Thursday, closing at $31.40.

The quarter’s results, which fell below Wall Street’s expectations, included a large write-off for Microsoft Corp.’s surface RT business. A poor reception for Windows 8 contributed to a revenue drop in the company’s operating system software unit.

Microsoft “struggled far more than we had expected,” said Cowen &Co. analyst Gregg Moskowitz, who downgraded the company’s stock to “Neutral” from “Buy,” and cut his price target to $33 from $38.

The analyst said in a note to investors that he is “much less confident” that the company can deliver healthy growth in the near future due to the magnitude of the Windows decline, the challenges for Surface, pressure on profit margins and the company’s reorganization plans.

Microsoft announced a major reorganization late week, aimed at helping it transform into a “devices and services” company that is less reliant on providing software for personal computers. But the earnings miss raised new questions as to whether the transition will succeed.

Janney Capital Markets analyst Yun Kim called the quarter’s results “weak,” with all five of Microsoft’s divisions reporting revenue below Wall Street’s expectations. Windows, Kim added, came in “especially weak,” reflecting not only the ongoing decline of the PC, but lack of demand for Surface and other tablets running Windows.

More in Herald Business Journal

Aerospace workers adjust to changing industry

The number of Boeing workers dropped almost 10 percent since last year.

Tom Hoban
Are millennials warming up to life in suburbia?

They dominate the apartment market and their wants need to be accounted for, says columnist Tom Hoban.

Camano artist mixes flask, paintings for successful cocktail

Art flasks prove popular as bachelorette gifts, birthday presents and wedding favors.

Fluke’s T6 Electrical Testers receives Innovation Awards honor

Fluke’s T6 Electrical Testers have received top honors in the Tools and… Continue reading

Everett volunteer named ‘community champion’ by Molina Healthcare

Everett’s Jorge Galindo was one of seven people across the state to… Continue reading

Cascade Valley Health to hold Festival of Trees in Arlington

Cascade Valley Health Foundation will be holding their fifth annual Festival of… Continue reading

7-Eleven program helped add 500 trees, shrubs to Everett park

Last month, 7-Eleven helped plant more than 500 trees and shrubs at… Continue reading

Pentagon inspector general praises secret $80 billion bomber

US Government Accountability Office in 2016 rejected a protest filed by Boeing-Lockheed Martin.

Everett’s Sentry Credit celebrates a quarter century in business

Sentry Credit Inc. in Everett is celebrating its 25th year in business.… Continue reading

Most Read