Microsoft Plunges Over 11 Percent; Pulls Entire US Market Down

Jacob Harper |

Still reeling from a very disappointing sales report that included a $900 million dollar write down, Microsoft (MSFT) shares continued their plunge that started after the bell July 18. Their stock is down over 11 percent on the day amid heavy trading, as investors flee the beleaguered tech company in droves.

Analysts already were not expecting much to get excited about with Microsoft’s 2013 fiscal fourth quarter earnings report on Friday. But when numbers came in even below the mediocre projections – 19.9 billion in revenue instead of the 20.9 billion expected – the stock plunged. 

Microsoft had to write down $900 million after cutting the price of their RT Surface tablet, which has so far failed to grab an audience or make a sizable dent in iPad sales. And analysts don't expect things to get much better. FDR Capital analyst David Hilal wrote in a note that "the key potential growth drivers (Windows 8, Surface) of the Microsoft story appear to be fading, heading into FY14" as Microsoft still struggles to figure out its new "One Microsoft" restructuring and strategy. 

Coupled with a disappointing, albeit less severe earnings shortfall by Google (GOOG) , the US market fell. The S&P 500 fell .11 percent to hit 1687.53. General Electric Co. (GE) , who also presented earnings after the bell on July 18, presented better than expected numbers, but it wasn’t enough to offset the underperformance of the tech giants. PNC Wealth Management James Dunigan Chief investment officer explained that Microsoft is just the capper on  “a lukewarm earnings (season) overall with a couple of high-profile misses.”

Google is down 1.76 percent to $894.36 a share on heavier than normal trading. Microsoft is down 11.69 percent to hit $31.30 a share while trading at over four times normal volume.  

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
GE General Electric Co 29.53 -0.37 -1.24 38,873,664
GEDSF Gedeon Richter Plc GDR Reg S 20.70 0.00 0.00 0
GOOG Alphabet Inc. 775.01 -6.55 -0.84 1,314,746
MSFT Microsoft Corporation 57.40 -0.63 -1.09 25,463,536

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