Software giant Microsoft said last night that its quarterly profits were virtually unchanged from a year ago, meeting lowered forecasts, and cautioned that it expected a tough road ahead amid slowing computer sales.

Microsoft, which employs about 2,000 in Dublin, said net profits for its fiscal second quarter, which ended December 31st last, were $2.62 billion (€2.77 billion), or 47 US cents a share, up slightly from the $2.44 billion a year earlier. The figure matched reduced analysts forecasts, cut after the company issued a rare profit warning last month due to slowing PC sales and corporate technology buying.

Microsoft expected third-quarter revenue in the range of $6.3 billion to $6.4 billion with per-share earnings at 42-43 US cents, short of the forecast estimate of 44 cents.