Microsoft Corp's quarterly profit fell a greater-than-expected 22% as sales of computers running its Windows operating system dipped and some revenue was deferred ahead of upcoming releases of its core Windows and Office products.
The sharp decline surprised investors who had underestimated the effect of weak PC sales sending Microsoft's shares down 1.3% in after-hours trading.
Microsoft said its fiscal first quarter profit fell to $4.5 billion or 53 cents per share from $5.7 billion or 68 cents per share in the year-ago quarter.
Sales fell 8% to $16.0 billion largely caused by the dip in demand for personal computers running Windows. The revenue decline was exaggerated by Microsoft's deferral of some $1.4 billion in revenue chiefly from its Windows unit.
Microsoft is betting the release of touch-friendly Windows 8 will rev up sales of PCs laptops and Windows-compatible tablets after its launches next week.