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Analysts' worst fears were realised today, with Microsoft admitting it was US$900 million short on sales projections for its Surface RT tablets.

The disappointing results came as Microsoft earlier this week moved to slash prices of the iPad competitor worldwide, including in Australia.

Broader results showed that Microsoft's revenue for the quarter was $19.9 billion, compared to the average $20.7 billion that Yahoo! Finance analysts had predicted.

And Microsoft brought in a disappointing $77.8 billion for the 2013 fiscal year, down from the $78.7 billion expected by analysts.

These numbers were up however compared to last year, meaning Microsoft could claim record revenues for both the quarter and the year.

Microsoft's profit figures were another disappointment for investors, with analysts expecting quarterly earnings of $0.75 per share, which instead turned out to be $0.59 per share.

The company's shares tumbled 6.3% in after-hours trading to $33.22, off $2.22.

The results showed Microsoft, while still extremely profitable, is struggling to shake off concerns that it hasn't fully worked out what it wants from Windows 8 yet.

Microsoft's new CFO Amy Hood said the overall downturn in the PC market was largely to blame for the poor results, but said the future was still promising for the company.

"While we have work ahead of us, we are making the focused investments needed to deliver on long-term growth opportunities like cloud services," she said.

Rick Sherlund, an analyst with Nomura Securities, told the Wall Street Journal the news was surprisingly bad across the company, with nearly all of the business units missing the company's prior expectations.

"It was a whiff across the board," he said. "It's the fourth quarter in a row that they've missed their guidance for the major segments of their business."

Microsoft CEO Steve Ballmer announced a massive restructure of the company last week.

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David Swan

David Swan is a tech journalist from Melbourne and is iTWire's Associate Editor. Having started off as a games reviewer at the age of 14, he now has a degree in Journalism from RMIT (with Honours) and owns basically every gadget under the sun.

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