Microsoft reported net income of $17.6 billion for the quarter, down 14% from a year earlier. In light of the slowdown in the personal computing industry and the broader economic slowdown.
According to Arab Net, Microsoft's revenue grew by 11% to reach $50.1 billion. Both results were better than analysts had expected.
Microsoft's Azure cloud services unit saw revenue increase 35% from a year earlier, but growth was slower than some analysts had hoped in a division that has been one of the company's biggest bright spots in recent years.
Microsoft said revenue from its Windows OEM operations fell 15% from a year earlier, which comes as demand for personal computers has fallen sharply in the wake of the pandemic-fueled boom.
Earlier last month, consultancy Gartner reported that worldwide PC shipments fell 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 tracking the PC market in the mid-1990s.
Microsoft also said revenue from Xbox content and services fell 3%. The company reportedly recently laid off employees in its Xbox division, among other parts of the company, because it - like many other tech companies right now - is looking to cut costs.
Microsoft shares fell 2% in after-hours trading on Tuesday after the earnings report.
Microsoft's stock has fallen more than 25% so far this year, amid a broader market slump as inflation continues to rise, geopolitical uncertainty from the war in Ukraine, and more macroeconomic headwinds wreak havoc in the tech industry.
In this environment, we focus on helping our customers do more with less, investing in growth areas and managing our cost structure in a disciplined manner.
Harris Anwar, chief analyst at Investing.com, described Microsoft's earnings report as a mixed bag in a comment after the results were announced on Tuesday.
Anwar said it shows that Microsoft weathers the economic storm better than other tech players, and that its diversified business model plays a big role in doing so. But he added that the slowdown in cloud computing growth was a cause for concern.
He added: If this slowdown continues, it may harm investment in the company's shares, which are considered a safe haven amid market turmoil, with these concerns reflected on the company's shares in extended trading.
