Microsoft said that its earnings in the recently ended quarter dropped as personal computer sales suffered from production holdups in China and sagging demand. A profit of $16.7 billion on revenue of $51.9 billion was reported by the US technology, topping the same quarter a year earlier but missing market predictions.
A Wedbush analyst said, “While the headline slight miss will cause agita on Street with a knee jerk reaction, this is extensively foreign exchange and China shut down. The core DNA of the Microsoft growth story is cloud and core Azure growth which was healthy this quarter and appears to have momentum into 2023 in spite of economic headwinds.”
Shutdowns at computer production facilities in China in May, and a declining market for personal computers, cost Microsoft some $300 million in revenue it would have made from Windows operating systems bought to power the machines. Due to entities cutting marketing budgets due to board economic woes, the career social network LinkedIn has suffered.
The company witnessed consumers spend less on Xbox video game content in the quarter compared to the same period a year earlier, in a possible sign that many are out playing in the real world more as pandemic restrictions ease. However, Microsoft’s cloud, business and productivity offerings progressed to thrive.