Microsoft misses expectations, points to foreign exchange rates and weak PC market – Meczyki.Net

Microsoft announced it fourth quarter results Tuesday, recalling Wall Street’s expectations. The company reported that its sales for the quarter ended June 30 were $51.9 billion, a 12% increase year-over-year. Analysts Were expecting about $52.5 billion. Net income rose 2% to $16.74 billion. this is considered Slowest revenue growth for Microsoft since 2020.

Microsoft lowered its Q4 prediction Between $51.9 billion and $52.7 billion in June, estimating that the forex exchange would interfere with its quarterly revenue. And for the most part, the company wasn’t wrong.

Microsoft cited that foreign exchange rate movement negatively impacted revenue by $595 million and decreased earnings per share by 4 cents.

The software company continues to experience other challenges posed by the deteriorating PC market — its biggest drop in years — as well as extended production shutdowns in China and scaled-down operations in Russia.

PC shipments experienced a steep decline, and Gartner predicted that worldwide PC sales could decline by about 10% this year.

Here are other key numbers from the report:

  • Xbox content and services revenue saw a slight decline of 6%. Hardware revenue fell 11%.
  • Windows OEM (Original Equipment Manufacturer) revenue down 2%
  • On the bright side, Microsoft’s Intelligent Cloud segment generated $20.91 billion in revenue, up 20%. Revenue from Azure and other cloud services increased 40% compared to 46% in the previous quarter.
  • The company also said that LinkedIn continues to grow as revenue was up 26%. However, this is down from the 34% growth of the previous quarter.
  • Office commercial products and cloud services revenue increased 9%, driven by 15% growth in Office 365 commercial revenue.
  • Office Consumer is also up 9% year-over-year.
  • Microsoft 365 subscribers reached 59.7 million customers.

Microsoft’s earnings follow the announcement that it will be the advertising technical partner for the upcoming ad-supported tier of Netflix.

The news also comes as the overall tech market faces a beating and companies slow down recruitment and announce layoffs. Earlier this month, Microsoft laid off less than 1% of its 180,000-person workforce, per Bloomberg. The company also said that it is slowing hiring going forward.