REDMOND, Wash. – Microsoft on Tuesday reported a 14% drop in profit for the July-September quarter compared to the same time last year, reflecting a weak market for personal computers affecting its Windows business.
The company reported quarterly net income of $17.6 billion, or $2.35 per share, which still slightly beat Wall Street expectations despite falling short of last year’s results.
The software maker from Redmond, Washington posted revenue of $50.1 billion in the quarter, up 11% from last year, also beating expectations.
Analysts expected Microsoft to earn $2.31 per share on revenue of $49.7 billion for the quarter.
Microsoft’s personal computing business, centered on its Windows software, was widely expected to take a hit due to economic uncertainties such as inflation. In addition, many consumers bought new devices during the pandemic, helping to cripple demand. The company receives licensing revenue from computer manufacturers who install its Windows operating system on their products.
Worldwide shipments of personal computers fell nearly 20% in the quarter from the same time last year, according to market research firm Gartner, which said it was the steepest decline since it began tracking the PC market in the mid-1990s. A disappointing sales season for new PCs also contributed to a fourth consecutive quarter of year-over-year decline, Gartner said.