The tech giant expects revenue for the quarter to range between $51.94 billion and $52.74 billion.
A stronger dollar eats into the profits of companies with expanding international operations.
Microsoft gets about half of its revenue from outside the United States.
The economic and inflation problems that are registered in the world have affected many companies, such as Microsoft, which announced this Thursday that it cut its earnings and sales forecast for the fourth quarter, becoming the latest US company to warn of the impact of a stronger dollar and causing its shares to fall 1.5 percent in midday trading.
According to data from Statista, in 2021, Microsoft’s worldwide revenue was approximately 168 billion US dollars, a record value that represents an increase of approximately 18 percent compared to 2020. A similar behavior was also manifested by its profit figure, which amounted to 44,200 million dollars; 13% more than in 2019.
Microsoft warns impact on profits and sales
Specialists point out that an aggressive Federal Reserve and increased geopolitical tensions have fueled a 14 percent gain in the dollar against a basket of currencies over the past year.
Given this, they point out that a stronger dollar eats into the profits of companies with expanding international operations that convert foreign currency into dollars.
That’s why Steve Koenig, managing director of SMBC Nikko Securities, noted that “software companies, including Microsoft, have significant operations outside of the United States and I think Microsoft is being cautious here to get ahead of the curve.” to (market) expectations and be transparent about currency impacts.”
Likewise, in the face of this scenario, Microsoft, which obtains approximately half of its revenues outside the United States, lowered its revenue forecast. for all three segments, including Windows, cloud and personal computing products.
The tech giant founded by Bill Gates expects revenue for the quarter to be between $51.94 billion and $52.74 billion, down from its previous range of $52.4 billion to $53.2 billion.
The world’s largest tech company lowered its earnings view to between $2.24 and $2.32 per share. from a previous expectation of between $2.28 and $2.35 per share.
For their part, analysts and according to Refinitiv data forecast earnings of $2.33 per share on revenue of $52.87 billion.
Speaking of past data, in April, the company forecast double-digit revenue growth for the next fiscal year.
Microsoft is not the only company that has been affected by this economic problem, as it has also forced companies such as Coca-Cola and Procter & Gamble moderate expectations for the rest of the year.
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