A sharp decline in Microsoft profits, under pressure from the personal sector computer

Recent data revealed that Microsoft’s profits fell by double digits during the third quarter of questyear, as the company faced a slowdown in the personal sector computer and a broader economic slowdown.

The tech giant posted a net profit of $ 17.6 billion for the quarter, in decrease of 14% compared to the previous year. Meanwhile, Microsoft’s revenue grew 11% to $ 50.1 billion. Both results were better than analysts expected.

Microsoft’s Azure cloud services unit experienced a 35% increase in revenue from the previous year, but growth was slower than some analysts had hoped in a division that has been one of the company’s biggest positive points in recent years.

Microsoft said revenue from its Windows OEM operations fell 15% from the previous year, which stems from the sharp decline in demand for personal computer in the wake of the pandemic-fueled boom.

Earlier last month, the Gartner consulting firm reported that PC shipments in worldwide decreased by 19.5% in the third quarter of 2022, compared to the same period last year. This represents the biggest drop in the market since Gartner began monitoring the PC market in the mid-1990s.

Microsoft also said that Xbox content and services revenue fell 3%. The company reportedly recently laid off employees in its Xbox division, among other parts of the company, because, like many other tech companies in right now, he is trying to cut costs.

After the earnings report on Tuesday, Microsoft shares fell 2% in the trading after-hour.

Shares of Microsoft have fallen more than 25% so far quest’year, in amid a broader market crash as inflation continues to rise, geopolitical uncertainty from the war in Ukraine and multiple macroeconomic headwinds devastated the tech sector.

“In this environment, we focus on helping our customers do more with less by investing in growth areas and managing our cost structure in disciplined manner, “Microsoft CEO Satya Nadella said in the quarterly statement on Tuesday.

Harris Anwar, Investing.com chief analyst, described Microsoft’s earnings report as a “mixed bag” in a comment after the results were announced on Tuesday.

“It shows that Microsoft is withstanding the economic storm better than other tech players and that its model of business Diversity plays an important role in doing so, “Anwar said. But he added that slowing growth in cloud computing was a cause for concern.

He continued: “If this slowdown continues, it could hurt investments in the company’s stock, which is considered a safe haven in amid the turmoil in the market, with the reflection of these concerns on the company’s shares in the trading extended “.

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