Microsoft profits fall 22 per cent as PC sales decline

Microsoft has revealed that net income for the quarter ending 30^th September dropped 22 per cent to $4.47 billion, that’s 53 cents per share. A year earlier net income was $5.74 billion, or 68 cents per share. Wall Street had expected earnings of 56 cents per share, so Microsoft shares have lost some ground in afterhours trading. Microsoft didn’t include pre-release sales of Windows 8; the extra $1.36 billion of Windows 8 sales made so far will be included in the next quarter results.

In the face of the results Microsoft CEO Steve Ballmer promised a “new era” as the world’s largest software company fights to remain relevant. PCs, from which Microsoft and its old ally Intel make a great deal of their profits, are in decline as people make greater use of mobile computing platforms like tablets and smartphones. Indeed many other PC related hardware and software companies have felt similarly chilly winds from the market, especially if they are struggling to find a way into tablets and mobiles but not really making an impact.

You can see from the above except of the company results the parts of Microsoft that are making and losing money and the comparison to last year’s results for the same quarter.

Speaking to Reuters, Daniel Ives, analyst at FBR Capital Markets said “Investors were not expecting a home run. All expectations are on the launch of Windows 8 and the entrance into the tablet market.” He surmised that “In light of the environment, the macro and PC situation, these are respectable numbers.”

Optimistically looking forward, Steve Ballmer said, in an introduction to the report; “Investments we’ve made over a number of years are now coming together to create a future of exceptional devices and services, with tremendous opportunity for our customers, developers, and partners.” This time next year we will know if the investments have paid off, as one of the biggest changes is about to arrive on 26^th October.