MSFT down by more than 1.5% after Microsoft lowers Q4 guidance

The shares of Microsoft have been underperforming since the company lowered its fourth-quarter guidance.

Microsoft has lowered its earnings guidance for the fourth quarter of the year. The company announced this latest development earlier on Thursday, citing unfavourable foreign exchange rate movement.

The tech giant told its investors it expects to generate between $51.94 billion and $52.74 billion in revenue for the quarter. This is down from its forecast in the range of $52.4 billion to $53.2 billion.

This latest development doesn’t come as a surprise as the company has previously warned of the effects of unfavourable exchange rates. In April, Microsoft finance chief Amy Hood said the exchange rates could affect the company’s earnings.

Hood said;

“We expect other income and expense to be negative $50 million reflecting FX remeasurement impact based on market conditions in April. Similar to the rest of our guidance, further equity and FX movements thru Q4 are not reflected in this number.”

The tech giant also slightly reduced its earnings forecast, stating that it now expects to have adjusted earnings per share in the range of $2.24 to $2.32. Microsoft previously estimated recording adjusted earnings per share between $2.28 and $2.35.

The new revenue forecast by Microsoft is below what Wall Street analysts had predicted. according to the consensus among analysts polled by Refinitiv, Wall Street analysts predicted Q4 revenue of $52.87 billion and an EPS of $2.33.

Since the announcement earlier today, the shares of Microsoft have been underperforming. 

MSFT is down by 1.5% since the United States market opened a few hours ago. At press time, MSFT is trading at $269.69 per share.

Similar to other leading stocks, MSFT has underperformed since the start of the year. MSFT began the year trading above $330 but has lost more than 20% of its value over the past few months.