Microsoft has taken a $US900 million ($NZ1.14 billion) inventory charge related to inventory for its slower-than-expected selling Surface RT tablet.
The Surface RT was released in the US in October and NZ in January. It was followed by the more powerful Surface Pro.
The Microsoft-made tablet has garnered some positive press, but so far failed to much of a dent in Apple iPad or Android tablet sales.
A lot of Surface tablets have been shipped (locally, IDC found Windows tablet shipments jumped from 1% to 8% of the NZ market in the first quarter; 130,000 tablets were shipped in total as the market grew 400%; how many Surfaces were actually sold is another matter).
“I want to be very clear: We know we have to do better, particularly on mobile devices,” CFO Amy Hood said in an interview with the Wall Street Journal.
Overall, Microsoft made a $US4.96 billion (56 cents a share) profit during the three months to June 30, against a year-ago loss (associated with a restructure and write-downs). Analysts had been expecting a 66c/share profit; the Surface RT writedown accounted for 7c/share in profit.
Revenue increased 10% agaisnt the year ago quarter to $US18.06 billion; analysts had been expecting it to top $US20 billion.
The company's online division, which includes its Bing search engine, broke into the black.
Windows division sales were down 6%, tracking the declining PC market. The company hopes for a boost from Windows 8.1, which returns the Start button and generally makes the new OS less of a culture shock.
Office sales were up 1.7% against the year-ago to $6.43 billion.
Microsoft shares fell 5% in after hours trading.
Last week CEO Steve Ballmer announced a major reorganisation that will see the company organised by functional units (such as marketing, engineering and sales) rather than by product division.
The Microsoft boss seemed undeterred by the Surface's slow start. Mr Ballmer said the company would develop more hardware inhouse.
NBR staff
Fri, 19 Jul 2013
Fri, 19 Jul 2013
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Microsoft makes $1 billion write-off on Surface tablet
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