Microsoft: Profits slump due to weak PC business

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Photo: GONZALO FUENTES / REUTERS

Microsoft earned significantly less at the end of the year - the high inflation and fears of recession are evidently making themselves felt here as well.

In the three months ended December, net income fell 12 percent year over year to $16.4 billion.

Revenue increased 2 percent to $52.7 billion, the weakest growth in more than six years.

After all, revenue in the important cloud business was slightly higher than analysts had assumed.

The Azure cloud platform is a key growth driver for the group and was a ray of hope in the past quarter with a plus of a good 30 percent.

However, this is the smallest increase since 2015, when the figures for this business area were broken down separately for the first time.

In its forecast for the current quarter, the group also predicted that growth at Azure would slow by four to five percentage points.

Meanwhile, in its Windows leg, Microsoft is being hit by the downturn in the PC market.

Business with the sale of the operating system to computer manufacturers shrank by 39 percent in the past quarter.

And in the current quarter, the group again considers a decline of a similar magnitude to be possible.

There were also declines in the games business related to the Xbox console.

But Microsoft surpassed 120 million active users on its Game Pass subscription service, which allows video games to be played over the Internet.

Microsoft announced last week that it would lay off around 10,000 employees.

Cuts and other restructuring measures cost Microsoft $1.2 billion.

Nadella relies on AI

Microsoft boss Satya Nadella sees great opportunities in the further development of artificial intelligence (AI).

The group wants to expand its commitment to OpenAI, the provider of the AI ​​software ChatGPT.

According to reports, this will cost Microsoft ten billion dollars.

Nadella emphasized the importance of software with artificial intelligence for the future.

"Over time, every app will be an AI app," he said in a conference call with analysts after the quarterly figures were presented.

Microsoft wants to embed OpenAI technology deep into its cloud platform.

mmq/Reuters/dpa