REDMOND, Wash. -- Microsoft reported a 12% drop in profit late Tuesday for the October-December quarter, reflecting the economic uncertainty the company said led to its decision to cut 10,000 workers.
The software-maker reported quarterly profit of $16.43 billion, or $2.20 per share.
Excluding one-time items such as $800 million to pay severance packages to laid-off employees, the Redmond, Wash.-based company said it earned $2.32 per share, which topped analysts' estimates of $2.29.
Shares of Microsoft Corp. increased more than 4% in extended trading Tuesday. The company released its earnings report after the market close.
Overall, Microsoft posted revenue of $52.75 billion in the October-December period, its second fiscal quarter, up 2% from the same period a year ago. Analysts polled by FactSet expected Microsoft to post revenue of $52.99 billion.
Last week, Microsoft blamed "macroeconomic conditions and changing customer priorities" for its decision to cut nearly 5% of its global workforce. It's one of a number of tech companies -- including Google parent Alphabet, Amazon and Facebook parent Meta Platforms -- to announce mass layoffs.
Microsoft's personal computing business, centered on its Windows software, was widely expected to continue a deterioration that began earlier last year because of economic uncertainties and crimped demand. Quarterly sales from that segment dropped 19% to $14.24 billion, the company said.
The company gets licensing revenue from PC manufacturers that install its Windows operating system on their products. Market research firm Gartner reported that worldwide PC shipments in the October-December quarter declined 28.5% from the same period of 2021, the steepest quarterly decline since Gartner began tracking the market in the 1990s.
Factors reducing consumer demand for PCs included inflation, higher borrowing costs and an expectation for a global recession, Garter said. Additionally, many people bought new computers early during the covid-19 pandemic, he said.
With a weak PC market, analysts were closely watching for results from Microsoft's other big business segments -- namely, its cloud-computing division, where sales grew 18% to $21.51 billion. Revenue also grew from the company's workplace software segment -- which includes the Office suite of products -- by 7% to $17 billion.
In a bid to further integrate the latest advances in artificial technology into its products, Microsoft announced Monday a "multiyear, multibillion dollar investment" in the artificial intelligence startup OpenAI, maker of ChatGPT and other tools that can create complex text, computer code and images on prompt.
After an outage early Wednesday, Microsoft said the company restored access to its email and video conferencing tools after thousands of users were unable to connect to the services.