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

Camano artist mixes flask, paintings for successful cocktail

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

Tesla rolls out the design for its 500-mile electric big rig

The truck will have an Autopilot system, which can maintain a set speed and slow down in traffic.

Washington revenues up $319 million

The state is projected to have nearly $2.8 billion in reserves by the end of the biennium.

How Airbus’s A380 deal with Emirates evaporated in Dubai

It came down to concern by Emirates that Airbus might shut down the jumbo program.

Everett’s Sentry Credit celebrates a quarter century in business

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

Funko donates hundreds of Pop! Heroes to Christmas House

Everett’s toy and collectibles maker Funko has donated hundreds of its Pop!… Continue reading

Donate coats for Clothes for Kids of Snohomish County

Washington Energy Services is conducting a local coat drive to benefit Clothes… Continue reading

Seattle Premium Outlets extend hours over Thanksgiving holiday

Seattle Premium Outlets will be offering extended Black Friday shopping hours in… Continue reading

Equipment rental and sales business H&E opens Mukilteo shop

Company hopes to capitalize on construction occuring in northwest Washington.

Most Read