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Reuters, Published July 18 2013

Microsoft profit below estimates after tablet charge

SEATTLE - Microsoft Corp on Thursday reported lower-than-expected quarterly earnings as slow personal computer sales ate into its Windows business and it took an unexpected $900 million charge for its inventory of unsold Surface tablets.

The world's largest software company reported fiscal fourth-quarter profit of 59 cents per share, compared with a 6 cents per share loss in the year-ago quarter when it wrote off the cost of a failed acquisition.

Wall Street had expected earnings of 75 cents per share, on average, according to Thomson Reuters I/B/E/S.

Revenue rose 10 percent to $19.9 billion, helped by sales of Microsoft's Office suite of applications, but fell short of analysts' average estimate of $20.7 billion.

Microsoft said the $900 million charge related to its Surface RT tablet, which was launched alongside Windows 8 in October but has not sold well.

Earlier this week, Microsoft said it was drastically cutting prices and expanding distribution of the model to entice buyers.