United was deposed as Premier League champions by Manchester City on Sunday and eliminated from the lucrative Champions League at the group stage in December.
The quarterly accounts show that earnings for the club owned by the American Glazer family dipped by almost 10 per cent year-on-year to 20.4 million pounds ($32.3 million) and revenue dipped by six per cent by 70.8 million pounds ($112.1 million).
United's cash reserves also dropped from 50.9 million pounds (then $80 million) at the end of 2011 to 25.6 million pounds (then $41 million) by March 31. The figure had stood at 150.6 million pounds (then $238 million) at the end of 2010.
"I do think everyone at the club, from (manager) Alex (Ferguson) down, agree we underperformed in Europe this year," United chief executive David Gill said earlier this week.
The 19-time English champions have been ranked football's most valuable club for eight years in a row by Forbes magazine, which valued them at $2.24 billion last month.
The club remains English football's biggest moneymaker, with enhanced sponsorship deals offsetting the drop in revenue from failing to advance further in the Champions League.
In fact, commercial revenue rose 15 per cent year-on-year to 27.3 million pounds ($43.4 million) and exceeded match-day revenue, including ticket sales, in the first three months of 2012.
"We should recognize we're a very successful club, one of the top three in terms of turnover in world football, and it generates a lot of cash to invest in players," Gill said. "We will continue to do so and our style is both buying players and giving youth a chance."
United continues to invest in developing Old Trafford and its training ground while spending more on its squad, with wages rising by 9 per cent year-on-year to 112.4 million pounds ($178 million).
"This increase largely relates to growth in player remuneration, driven by new player acquisitions and further contractual negotiations together with increased costs and headcount arising from the continued growth in our sponsorship and commercial operations," United's quarterly report says.
The club's debt, resulting from the 2005 takeover by Glazers, has been cut by 61 million pounds year-on-year to 423.3 million pounds ($673.8 million) despite incurring 18.2 million pounds ($28.8 million) in interest payments in three months.
Rob Harris can be reached at www.twitter.com/RobHarris