I've heard the words "surprise" and "shocker" used to describe the company's miss on earnings per share and revenue. But was it really such a bombshell?
The last time we talked about the state of Microsoft, and in particular the company's management, I said the following:
Say what you want about the word "conviction" in the world of investing, but patience has its limits. Cheering on a company is all well and good. But if it's not matched by execution, there's a point when it's best to cut your losses and move on. With shares of Microsoft having already gained 25% on the year, now's the perfect time to move on to the next good idea. It's all downhill from here.I said this while the stock was making new 52-week highs in what seemed like every other week. I was not impressed -- not as long as Microsoft was still being led by the current management team, which has shown an inability to find the hidden value this company still has. How it still deserves the benefit of the doubt remains a mystery. While Microsoft's fourth-quarter earnings results do show the company still has some say in how corporate IT functions, there were still plenty of missed opportunities as the company tries to compete with Apple (AAPL) and Google (GOOG) in mobile devices. With management's poor track record of execution, I don't believe the recently announced "reorganization plan" will be enough to reward shareholders for their patience.