Microsoft just reported its financial results for the three months ended June 30, 2022, the fourth quarter of its 2022 fiscal year. Both revenue and profits came in below Wall Street’s expectations. Microsoft said “evolving macroeconomic conditions and other unforeseen items” impacted its results in several ways.
Here are the key numbers.
- Revenue: $51.9 billion, up 12%, vs. $52.4 billion expectation.
- Earnings: $2.23/share, up 3%, vs. 2.30 per share expectation.
These are the factors Microsoft cited in its earnings release.
- Unfavorable foreign exchange rate movement within the quarter negatively impacted revenue and diluted earnings per share $(595) million and $(0.04), respectively. …
- Extended production shutdowns in China that continued through May and a deteriorating PC market in June contributed to a negative impact on Windows OEM revenue of over $(300) million
- Reductions in advertising spend contributed to a negative impact on LinkedIn as well as Search and news advertising revenue of over $(100) million.
- With the ongoing war in Ukraine, we made the decision to significantly scale down our operations in Russia. As a result, we recorded operating expenses of $126 million related to bad debt expense, asset impairments, and severance.
- As part of a strategic realignment of our business groups, we recorded employee severance expenses of $113 million, excluding Russia.
Developing story, more to come.