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.
For instance, the company posted revenue of $19.9 billion. While this was good enough for 6% year-over-year growth, it fell 4% short of estimates. The Windows division generated revenue of $4.41 billion for the quarter, which was good enough for 6% year-over-year growth. Yet, it fell short of estimates by more than 8%. Even the company's strong-performing Business division, which grew 15% year over year fell 3% short of estimates. There are also arguments suggesting the company is in transition, which by virtue it deserves more time. Perhaps this may be true. But this excuse is premature. Besides, management has yet to fully disclose what the company's next direction will be under its "restructuring plan" nor do we know how these divisions are going to be impacted. Plus, even if we had better information, investors aren't doing themselves any favors by continuing to give management the type of pass that they've enjoyed over the past decade. Profit-wise, things were pretty much the same -- there were some good, followed by several "yeah, buts..." ORCL) and Salesforce.com ( CRM) are doing laps around Microsoft. I just don't believe management has taken the sort of risks necessary to grow Microsoft beyond its core businesses. Essentially, management, and in particular CEO Steve Ballmer has not been able to effectively answer, what's next. As I warned two months ago while the stock was making new highs, it was time to take profits. On Friday shares were hammered, down more than 11% at the close following the earnings miss. But we should have expected this. I'm not suggesting Microsoft doesn't have value. After all, the company still rakes in plenty of cash each quarter. But until management is able to show it can use its cash to compete with Apple and Google, there will always be doubt. For now, there's no doubt that investors are angry. But don't be angry at Microsoft. At the time of publication, the author held shares of AAPL. Follow @saintssense This article was written by an independent contributor, separate from TheStreet's regular news coverage.