AAN FRANSISCO, United States — Microsoft
on Tuesday said that its earnings in the recently ended quarter fell shy of
expectations as personal computer sales suffered from production holdups in China
and sagging demand.
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The US technology giant reported profit of
$16.7 billion on revenue of $51.9 billion, topping the same quarter a year
earlier but missing market forecasts.
The earnings stumble was due mostly to
foreign exchange rates and shutdowns of personal computer factories in China,
Wedbush analyst Dan Ives said in a note to investors.
Microsoft said that the strong US dollar
made its offerings more costly in foreign markets, hurting sales.
"The most important core business;
cloud and commercial bookings was relatively rock solid despite fears,"
Ives said.
"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 despite economic headwinds."
Microsoft shares were up some 4 percent in
after-market trades that followed release of the earnings figures.
"In a dynamic environment we saw strong
demand, took share, and increased customer commitment to our cloud
platform," said Microsoft chief financial officer Amy Hood.
Shutdowns at computer production facilities
in China in May, and a deteriorating market for personal computers, cost
Microsoft some $300 million in revenue it would have made from Windows
operating systems bought to power the machines, the earnings report indicated.
The personal computer market had been in
steady decline prior to the pandemic, as people turned to smartphones or
tablets.
A massive shift to shopping, working,
socializing, and playing from home reignited demand for desktop computing power,
but it remains to be seen whether that appetite will remain post-pandemic.
Ad revenue at Microsoft's online news,
search, and career social network LinkedIn suffered due to companies cutting
marketing budgets due to broad economic woes, the company said.
The tech veteran based in the US state of
Washington also logged $126 million in operating expenses related to scaling
back its operations in Russia because of that country's invasion of Ukraine.
Microsoft saw consumers spend less on Xbox
videogame 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 continued to thrive.
"We see real opportunity to help every
customer in every industry use digital technology to overcome today's
challenges and emerge stronger," said Microsoft chief executive Satya
Nadella.
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