Microsoft on Thursday posted lower than anticipated earnings which sent shares plummeting in afterhours trading. If that weren't enough, the company also took a $900 million charge on unsold Surface RT tablets.

For the fiscal fourth quarter, Microsoft's revenue increase 10 percent to $19.9 billion led by solid sales of the company's Office suite of applications. Even still, however, it fell short of analysts' average estimates of $20.7 billion. Overall, Microsoft turned a quarterly profit of $0.59 per share which looks solid compared to the $0.06 loss from the same time a year ago but fell well short of Wall Street's estimated $0.75 per share profit.

Brendan Barnicle, an analyst at Pacific Crest Securities, said it was the biggest miss that he can remember from Microsoft. It simply looked like everything was weak, he noted.

Last week, Redmond announced a company-wide reorganization that is said to better align itself with its new focus on devices and services. CEO Steve Ballmer told employees via memo that the reshuffling will allow Microsoft to innovate with greater speed, efficiency and capability.

And just earlier this week, Microsoft slashed the price of their Surface RT tablet in a move that now makes a lot more sense given the $900 million write-off. The slate, originally priced at $499 for the 32GB model and $599 for the 64GB unit, is now priced at just $349 and $449, respectively.

Share prices dropped by more than six percent in afterhours trading as of writing following a five year high. Stock is Microsoft was up 32 percent this year before the mass selloff following the earnings report.