New York, July 24 (DPA) Software giant Microsoft Corp has reported sales of $13.1 billion for the latest quarter, well below Wall Street expectations of more than $14 billion.

The PC market has dwindled for three straight quarters.

The company, based in Redmond, Washington, saw profits for the fourth quarter of its budget year drop 29 percent amid falling demand for its Office software package and Windows operating system.

'The economy continues to be challenging, and we need to lift our game to another level,' chief financial officer Chris Liddell said.