Microsoft earnings, sales badly miss expectations; $900 million inventory writedown on Surface tablet flop

“Microsoft’s fourth quarter earnings and sales missed expectations by a wide margin as the PC market slowdown and a writedown of Surface RT inventory painted a bleak picture,” Larry Dignan reports for ZDNet.

“The company reported fourth quarter earnings of $4.97 billion, or 59 cents a share, on revenue of $19.9 billion,” Dignan reports. “The results include a $900 million inventory writedown for Surface RT that amounts to 7 cents a share.”

Dignan reports, “Wall Street was expecting Microsoft to report fourth quarter earnings of 75 cents a share on revenue of $20.73 billion… The quarter for Microsoft reflects a tale of two companies—an enterprise side that’s killing it and a Windows part that’s struggling to regain its footing as tablets cannibalize PCs.”

Read more in the full article here.

MacDailyNews Take: Click!

Some people laughed when we stated:

As we have always said, even as many short-sightedly waved (and continue to wave) the white flag, the war is not over. And, yes, we shall prevail… No company is invincible. Not even Microsoft.MacDailyNews Take, January 10, 2005

Who’s laughing now?

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Steve Jobs’ revenge – April 12, 2013
Apple Macintosh on the rise as Windows PC market plummets – April 11, 2013
Gartner: PC Market posts 11.2 percent decline in Q113; Apple Mac sales up 7.4 percent in U.S. – April 10, 2013
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55 Comments

    1. Not really; for now, there is no perspective for Microsoft to become destroyed. It is still incredibly big and profitable.

      As Jobs said, there is no need for Microsoft to fail, for Apple to succeed. Microsoft just have to stagnate enough, and this is what they did.

    1. So all the “competition” (NOT!) report huge misses…oh what a surprise…

      Even with Apple’s new guidance, Apple will surprise all these idiot analists and know nothings on Tuesday- watch.

      Guaranteed.

        1. I don’t know about that. I think Hannah had a great point that the Apple Bear Bullshit has lost its entertainment value. The analcysts are changing the channel for some new meat to amuse them.

        2. If recent history repeats, then sure, it will drop like a rock. But depending on the past to predict future stock movements tends to get investors blindsided. There’s a handful of good reasons to think AAPL has already past the low point and is starting the climb up. Its future is far from certain.

  1. Currently MS is a cash cow. The stock will remain level as long as they continue paying a decent dividend. When that ends, the stock will plunge. If the reorganization were bring done under someone like Lou Gerstner (IBM), then maybe there would be a chance to see MS’s revival.

        1. Wow, had to re-read that a few times. Takes me back to the early-80’s when my elementary school got our first Apple ][+ when I was in 5th grade. I even bought a book called “Basic Apple Basic” and it’s still on my bookshelf at my parent’s house.

  2. Ya know, there used to be Microsofties. What happened to them?

    It seems like every message I get from them now says “Sent from my iPad” or “Sent from my iPhone.”

  3. The only thing that is a shame is that most of the Microsofties went to Google, because of their emotions tied to the hatred of Apple. People rarely make decisions based on logic (if they did, they’d be using Apple computers), because they are so tied into the idea that they were RIGHT. Most people would rather burn in hell than admit they were wrong. Which, using Android devices, isn’t that far off.

  4. Actually, the quarter doesn’t look too bad too me. Revenue and operating income are up from the same quarter last year. ONline services division is doing much better. They missed Anal-cysts expectations but what do these guys know?

  5. > Microsoft’s fourth quarter earnings and sales missed expectations by a wide margin as the PC market slowdown and a writedown of Surface RT inventory painted a bleak picture

    The Surface RT writedown is 100% Microsoft’s own fault. But the media tends to excuse Microsoft’s weak Window 8 performance, because there is this ongoing “PC market slowdown.” And that is why revenue from Windows 8 is not meeting expectations.

    The TRUTH is that Microsoft is mostly responsible for the general PC market stagnation, because most Windows PC users DO NOT want a tablet, and they do not want to wave their arms and hands around to touch the screen. That’s why sales are slow in the Windows world. Customers do not want to use a PC with Windows 8.

    If they get a new PC without a touch screen, they are second-class citizens in the Windows world, because Windows 8 needs a touch screen to be fully functional. If they get a new PC and opt for Windows 7, they are second-class citizens using an OS that is already already four years old. So the default choice is to keep using what they already have for a while longer… Or they can get a Mac and feel more at home than with the latest version of Windows.

  6. By the various names MS has used for products, which I consider to be just plain turkeys, I have to conclude that a real BIG turkey did the naming.

    Who? Don’t know, but I remember an interview with a programmer from MS that said Ballmer was introducing “Bing” and when the programmer didn’t zing up the word Bing, Ballmer fired him on the spot.

    1. As long as Bill Gates controls the Microsoft Board of Directors, nothing good will happen. Ballmer’s actions are a pale reflection of Gates’s will. There is an unhealthy, not to say unholy, influence there. In the case of Apple we can say at least that the succeeding CEO had a mind of his own, and unfettered by founder meddling.

  7. Much as this is sweet revenge after suffering as an Apple user through the Nineties and Noughties, at least MS “thunk different” with its mobile OS – unlike Google.

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