Microsoft profits down 14% as Windows hit by weak PC sales

REDMOND — 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 undershooting last year’s results.

The Redmond, Washington-based software maker 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 given economic uncertainties such as inflation. In addition, many consumers bought new devices during the pandemic, helping crimp demand. The company gets licensing revenue from PC manufacturers who install its Windows operating system on their products.

Worldwide shipments of personal computers declined almost 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 back-to-school sales season for new computers also contributed to a fourth consecutive quarter of year-over-year decline, Gartner said.