Microsoft reports lower than expected earnings in fourth quarter

Microsoft reported lower than expected earnings on Thursday for the fourth quarter of its 2013 fiscal year, including a $900M charge for its unsold Surface RT tablet inventory. The company reported quarterly revenue of $19.90 billion for the quarter ended June 30, 2013. Operating income, net income, and diluted earnings per share for the quarter were $6.07 billion, $4.97 billion, and $0.59 per share.

Wall Street had estimated earnings of 75 cents per share, on average, according to Thomson Reuters I/B/E/S, and the Surface write off alone accounted for lowering diluted earnings by 7 cents a share.

For Microsoft's fiscal year 2013, the company's revenue, operating income, and diluted earnings per share were $77.85 billion, $26.76 billion, and $2.58 per share. 

In Microsoft Business Division, which includes Microsoft Office, SharePoint, and Microsoft Dynamics, revenue grew 14% for the fourth quarter and 3% for the full year. Microsoft Dynamics revenue grew 13% in the fourth quarter, according to SEC filings. MBD's 14% growth in revenue, an $889 million increase, included $782 million that came from previously deferred revenue related to the Office Upgrade Offer. Adjusting for that recognition of previously deferred revenue, Microsoft Business Division non-GAAP revenue increased 2% for the fourth quarter. Office 365 is now on a $1.5 billion annual revenue run rate.

Last quarter, Microsoft beat earnings estimates with 72 cents per share earnings and an 8% increase in MBD revenue. Microsoft Dynamics revenue increased 13% in the third quarter. In 2013 third quarter filing, Microsoft reported that Dynamics saw an 11% revenue increase in Dynamics revenue for the last nine months compared with the previous year.

In the fourth quarter of fiscal year 2012, Microsoft had reported quarterly revenue of $18.06 ...