SAN FRANCISCO (AP) – Microsoft reported a surprise drop in sales and profit for the first three months of the year, a sign the tech giant is still trying to find its way in the post-PC era.
Wall Street was expecting the company to show positive results from a series of changes that CEO Satya Nadella has been making. Instead, revenue for the January-March quarter fell 6 percent to $20.5 billion, while profit plunged 25 percent to $3.76 billion.
Thursday’s report came as other industry stalwarts reported their own struggles with seismic shifts in the way people use technology.
On Monday, IBM reported its 16th consecutive quarter of revenue decline, as commercial customers abandon the once-standard model of buying programs to install on their own computers, and instead use more software online. A day later, Intel said it’s cutting 12,000 jobs as fewer people buy PCs that run on Intel processors, opting instead for mobile devices such as smartphones and tablets.
But many analysts were expecting Microsoft to do better. While sales of personal computers have been sliding for the past four years, Nadella has been working to make Microsoft less dependent on revenue from its flagship Windows operating system, used mostly on PCs.