The firm’s stock dropped 10 percent in after-hours trading, even though revenue and profits both topped their numbers from the second quarter of 2012.
Why did the market freak out? The biggest reason was that Microsoft booked a $900 million charge for “inventory adjustments” for its Surface tablets. In plain English, Microsoft admitted that its heavily promoted tablet is selling poorly. And that’s an ominous sign for the Redmond, Wash., firm’s long-term prospects. Tablets and smartphones are the future of computing, and Microsoft is falling farther behind the market leaders, Apple and Google.
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