Microsoft stock in biggest one-day fall since 2009

Fri Apr 29, 2011 2:25pm EDT

* Shares down 4.8 percent, most since July 2009

* Windows sales disappoint, though profit met estimates

* Optimism after Intel results misplaced - analyst

SEATTLE, April 29 (Reuters) - Microsoft Corp (MSFT.O) shares fell their most in almost two years on Friday, a day after the software company reported a dip in its Windows operating system sales.

The world's second-largest tech company behind Apple Inc (AAPL.O) met Wall Street's profit estimate and beat on overall sales in its earnings report on Thursday.

But investors were concerned with lower personal computer sales nagging at Windows, Xbox sales bringing down profit margins and losses in its online business.

Microsoft shares were down 4.8 percent at $25.41 in afternoon Nasdaq trading, the biggest one-day percentage fall since July 2009.

The shares are back to the level they were at on Monday, before a run-up leading into quarterly earnings. The stock had risen sharply after chip maker Intel Corp (INTC.O) forecast revenue above Wall Street estimates, feeding optimism that a dip in PC sales last quarter did not indicate a long-term trend. [ID:nN19291560]

"Everyone, including myself, pounded the table on the Intel trade," said BGC Partners analyst Colin Gillis. "And it just didn't happen."

PC sales fell 1 percent last quarter, according to research firm Gartner [ID:nN13301394]. Microsoft's results reflected that, although it said business demand was outpacing weak consumer demand for PCs.

The stock is down 18 percent in the last 12 months, compared to a 16 percent gain in the Nasdaq.

(Reporting by Bill Rigby. Editing by Robert MacMillan)

((bill.rigby@thomsonreuters.com; +1 206 418 9236; Reuters Messaging: bill.rigby.reuters.com@reuters.net)) Keywords: MICROSOFT/

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