Microsoft shares tumble on software giant’s big profit warning

Microsoft has released revised guidance for its fiscal fourth-quarter earnings that were lower than previous guidance, sending the stock sharply lower.

The software giant now expects earnings per share to be in the range of $2.24 to $2.32, down from previous estimates of $2.28 to $2.35 per share.

Revenue is expected to be between $51.94 billion and $52.74 billion, down from previous forecasts of up to $53.20 billion.

Microsoft yesterday morning issued new guidance in a securities filing aimed at “helping investors understand the impact of unfavorable exchange rate movements in the fourth quarter of fiscal 2022 since the April 26 forward-looking guidance.”

The company sees a $460 million impact on fourth quarter revenue from currency fluctuations.

The pace of US interest rate hikes relative to other advanced economies and the war in Ukraine have fueled demand for the dollar, which is up more than 6 percent year-to-date.

Treasury Secretary Janet Yellen said in a recent press conference that the government is committed to a market driven exchange rate.

Microsoft shares fell about 3 percent in early New York trade, dragging the broader market lower after price declines on Wednesday.

In its latest earnings report, released in April, Microsoft reported quarterly sales and earnings that beat analysts’ forecasts, buoyed by robust growth in demand for cloud services.

Its shares have been hit by a general market sell-off that has hit the technology sector particularly hard.

Rising interest rates generally reduce the appeal of so-called “growth stocks” like Facebook — now renamed Meta. Microsoft shares tumble on software giant’s big profit warning

Fry Electronics Team

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