PC shipments dip hits Microsoft hard in FY23 Q1 earnings

October 26, 2022

Microsoft has had a bit of a bumpy start to fiscal year 2023, as the jolts to the PC market in terms of sales and shipments have reflected in the FY23 Q1 earnings that the company has just put up.

Despite PC shipments riding much higher than they had been in pre-pandemic levels, unit sales practically dropped off a cliff during the past couple of quarters. So, much so that even Intel and AMD fired off warning flares not too long ago.

And for a company like Microsoft, this decline was too step to overcome.

As a result, Windows OEM revenue was down a massive 15%. The software titan had only predicted a decline to the tune of high single digits, but demand for PCs and laptops took a much bigger dive than anticipated, making this a rare miss for Microsoft.

Redmond says that this 15% is actually offset by 5 points of positive impact from the Windows 11 revenue deferral from the previous year, hinting that things may be much worse than believed.

It did net $50.1 billion in revenue in this first quarter of its fiscal year, beating Wall Street estimates of $49.7 billion, so that is good news.

More good news is the fact that Surface and devices numbers were up 2%, also beating expectations. Of course, these figures came well before the launch of the Surface Pro 9 and the Surface Laptop 5, so we will have to wait and see what kind of a performance they pull off in the second quarter.

Otherwise, things were business as usual for the technology titan, which witnessed double-digit growth across Azure, LinkedIn, Office 365 Commercial, Office consumer products, and Dynamics.

Microsoft returned $9.7 billion to shareholders in the form of share repurchases and dividends in the first quarter of fiscal year 2023, representing a decrease of 11% compared to the first quarter of fiscal year 2022.

The company warns of the typical industry trade winds, competition, as well as COVID-19 related setbacks to manufacturing, shipping, and logistical issues.

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Fahad Ali is a professional freelancer, specializing in technology, web design and development and enterprise applications. He is the primary contributor to this website. When he is not typing away on his keyboard, he is relaxing to some soft jazz.

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