Microsoft stock price suffers its biggest one-day drop since 2009 following yesterday’s earnings report.
At one point, the stock was down more than 4%, its biggest drop since July 2009, when the company reported disappointing results for the fourth quarter of its fiscal 2009. By the end of the day, it s was up a bit and was down just under 3%.
Microsoft’s revenue and profit actually beat consensus yesterday, although earnings were helped by a one-time tax benefit.
But investors expected Windows activity to thwart the drop in PC sales, as Intel did last week. Instead, Windows revenue fell 4%
Consumer PC sales were particularly weak: down 8%, Microsoft said in its earnings call.
In a call with SAI yesterday, Microsoft explained that Intel’s results were helped by the fact that it moved netbooks into a different segment, and by higher prices and inventory fluctuations related to the introduction of its new Sandy Bridge chipset. Microsoft did not benefit from these advantages and was very affected by a 40% drop in netbook sales.
Presumably, many of those former netbook buyers are now buying iPads instead.
Investors might also be concerned about the upcoming anniversary of the release of Office 2010. Microsoft’s Business division, which includes Office and some enterprise servers like Exchange (email) and SharePoint (collaboration), has been the main driver of growth over the past three quarters. But Office 2010 was released towards the end of June last year. As the anniversary passes, this division will face much tougher comparisons to last year.
[H/T: Reuters]
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