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Microsoft Sales Drop Amid Weak PC Market

Microsoft Holds Annual Shareholder MeetingMicrosoft Holds Annual Shareholder Meeting
Microsoft CEO Satya Nadella.Photograph by Stephen Brashear—Getty Images

(Reuters) – Microsoft’s quarterly adjusted profit missed analysts’ estimates as a continued slump in personal computer sales hurt the company’s core Windows business, sending its shares (MSFT) down 4% in extended trading.

The company’s net income fell to $3.76 billion, or 47 cents per share, in the third quarter ended March 31, from $4.99 billion, or 61 cents per share, a year earlier.

Revenue fell to $20.53 billion from $21.73 billion.

Adjusted revenue rose to $22.08 billion from $21.73 billion.

Excluding one-time items, Microsoft earned 62 cents per share. Analysts on average had expected a profit of 64 cents per share on revenue of $22.09 billion, according to Thomson Reuters I/B/E/S.

Revenue in Microsoft’s “intelligent cloud” business, which includes the Azure cloud infrastructure and services business as well as products such as server software, rose 3.3% to $6.1 billion in the quarter.

Chief Executive Satya Nadella has focused on developing the company’s cloud business with his “mobile first, cloud first” strategy, since taking over in early 2014.

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Windows OEM revenue declined 2% in constant currency.

Worldwide PC shipments fell 11.5% in the first quarter, according to research firm IDC.