Microsoft cuts quarterly forecast for revenue, profit on forex hit

Shares fall 3%.
Image: Getty Images

Microsoft on Thursday cut its fourth-quarter forecast for profit and revenue, citing a hit from a stronger dollar, sending the tech giant’s shares down 3%.

The dollar has climbed about 14% against a basket of currencies over the last year, driven by a hawkish Federal Reserve and heightened geopolitical tensions.

A stronger greenback has pressured the profits of US multinational companies that convert foreign currency into dollars, adding to corporate worries over soaring inflation and pushing some to more actively seek ways to hedge their earnings.

Microsoft, which gets the bulk of its revenue from cloud services, expects revenue for the quarter to be between $51.94 billion and $52.74 billion, down from its prior range of $52.40 billion to $53.20 billion.

It cut the profit view to between $2.24 and $2.32 per share from a prior expectation of between $2.28 and $2.35 per share.

Analysts are forecasting earnings of $2.33 per share on revenue of $52.87 billion, according to Refinitiv data.

Microsoft had in April forecast double-digit revenue growth for the next fiscal year, driven by demand for cloud computing services.

Salesforce.com, Coca-Cola Co, Procter & Gamble and Philip Morris International are some others that have warned of a profit hit due to a stronger dollar.

COMMENTS   0

You must be signed in and an Insider Gold subscriber to comment.

SUBSCRIBE NOW SIGN IN

LATEST CURRENCIES  

USD / ZAR
GBP / ZAR
EUR / ZAR
BTC / USD

Subscribe to our mailing list

* indicates required
Moneyweb newsletters

Instrument Details  

You do not have any portfolios, please create one here.
You do not have an alert portfolio, please create one here.
INSIDER SUBSCRIPTION APP VIDEOS RADIO / LISTEN LIVE SHOP OFFERS WEBINARS NEWSLETTERS TRENDING

Follow us: