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Microsoft shares slip with earnings disappointment

Steve Ballmer, former CEO of Microsoft, walks past a projected display showing Bill Gates, lower left, and himself, during a discussion of Nokia's Lumia 920, equipped with Microsoft's Windows Phone 8, Sept. 5, 2012 in New York.
AP Photo/Mark Lennihan
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Steve Ballmer, former CEO of Microsoft, walks past a projected display showing Bill Gates, lower left, and himself, during a discussion of Nokia's Lumia 920, equipped with Microsoft's Windows Phone 8, Sept. 5, 2012 in New York.

Microsoft stock is taking a hit after failing to deliver on financial market expectations. One reason is the Windows Phone.
 
The company reported  its earnings after markets closed, saying quarterly profit was 62 cents per share. Analysts had expected 64 cents per share. The stock fell by about 5 percent to almost $53 in after-hours trading.

Sales of the Windows phone, which has never met Microsoft's expectations, were down 46 percent in the third quarter of Microsoft’s fiscal year ending March 31 compared to the same quarter in the previous year. Microsoft says it is carrying a large inventory of the devices.

Weakness in personal computer sales has been pressuring other tech giants, such as Intel Corp. and HP Inc. But Microsoft said sales of its Surface tablet are up 61 percent.

Microsoft's cloud business grew 120 percent, though growth was slightly stronger last year.