In this Thursday, June 20, 2013, photo, people crowd the aisles during the grand opening of a Microsoft retail store in downtown Portland, Ore. Microsoft Corp. reports quarterly financial results after the market closes on July, 18, 2013.LOS ANGELES – Microsoft Corp.’s foray into the tablet computer market resulted in a large write-down for the April-June quarter, and a poor reception for Windows 8 contributed to a drop in operating system software revenue.
The missteps in both strategic product lines, reported in quarterly results Thursday, disappointed Wall Street and shares plunged 6 percent to $33.30 in after-hours trading.
The write-down on the Surface RT tablet amounted to $900 million. Even without it, Microsoft’s results would have fallen short of expectations.
The results came a week after the company announced a major reorganization to help transform into a “devices and services” company that is less reliant on providing software for personal computers. The earnings miss raised new questions as to whether the transition will succeed.
“It doesn’t inspire a lot of confidence,” said Nomura Securities analyst Rick Sherlund. “You’re in the hardware business now, and pretty shortly after entering it you have a pretty big write down. That’s embarrassing.”