Microsoft Corp. fell the most in more than four years after fourth-quarter profit missed analysts' projections by the biggest margin in at least a decade as demand weakens for Windows-run personal computers.
Results also were hurt by a $900 million writedown of Surface tablet inventory, shaving 7 cents a share from earnings. Excluding that, profit was 66 cents a share, Microsoft said Thursday, trailing analysts' 75-cent prediction.
Stung by a Surface device that few consumers want, the company faces a shift by consumers to mobile gadgets that offer many of the same features as laptops and desktops at lower prices.
CEO Steve Ballmer's effort to focus the company on devices and services may reduce profit as both areas carry thinner margins than traditional software.
"PCs were just uglier than people thought they would be, and people also had more Surface sales in there than there were," said Mark Moerdler, an analyst at Sanford C. Bernstein & Co. in New York, who rates Microsoft shares outperform.
Microsoft fell 11 percent to $31.40 at Friday's close in New York, the most since January 2009. The stock has gained 18 percent this year, compared with a 19 percent increase in the Standard & Poor's 500 Index.
PC shipments fell 11 percent last quarter, Framingham, Mass.-based IDC said. Surface, Microsoft's first-ever computer, shipped just 900,000 units in the last two quarters, IDC said.
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