(Reuters) – Microsoft on Thursday lowered its fourth-quarter profit and revenue forecasts due to the strong dollar, sending the stock down.
Around 2:10 p.m. GMT, the stock fell 2.2% on Wall Street against a gain of around 0.50% for the Nasdaq and the S&P-500.
Over the past year, the dollar has increased by 14% against a basket of reference currencies, supported by expectations of rate hikes by the US Federal Reserve and geopolitical tensions.
Microsoft, which derives most of its revenue from cloud computing services, now expects quarterly revenue of between $51.94 billion (€48.47 billion) and 52.74 billion, down from a previous range of 52.40 billion to 53.20 billion.
The earnings per share forecast was reduced from 2.28-2.35 dollars to 2.24-2.32.
Analysts ahead of Microsoft’s announcement had expected earnings of $2.33 per share on revenue of $52.87 billion, according to Refinitiv data.
“Software companies like Microsoft have significant operations outside of the United States and I think the group is being cautious in getting ahead of (market) expectations and being transparent about currency impact,” Steve said. Koenig, managing director of SMBC Nikko Securities.
The Redmond, Wash.-based group said in April it expects double-digit growth for its next fiscal year, driven by cloud demand.
Salesforce.com, Coca-Cola, Procter & Gamble and Philip Morris International are among the companies that recently issued earnings or forecast warnings due to currency effects.
(Report Nivedita Balu in Bangalore; French version Claude Chendjou, edited by Sophie Louet)
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