Microsoft Revenue Up 2 Percent, but Profit Drops 12 Percent

The company, which announced plans to lay off 10,000 workers last week, had warned that is was facing a significant slowdown in the growth of its sales.

Faced with the economic swoon it had been telling investors to expect, Microsoft on Tuesday reported its slowest growth in six years, as both consumers and businesses around the world put the brakes on spending.

The technology giant said revenue increased 2 percent from a year earlierto $52.7 billion for the three months that ended in December. Profit fell 12 percent to $16.4 billion.

Both were below Wall Street expectations, according to FactSet, but Microsofts share price was up more than 4 percent in after hours trading thanks largely to its cloud-computing business.

Investors have been closely watching Microsofts cloud computing business and Azure, its flagship cloud product, because of their importance to the companys future. In October, the company told investors to expect Azures growth to slow five percentage points in the quarter. But Azure sales growth slowed to 31 percent, slightly better than analysts feared, and the overall segment it calls Intelligent Cloud was up 18 percent, roughly in line with expectations.