Microsoft cited the impact of foreign-exchange rates as the U.S. dollar has strengthened.
Photo:
Mike Segar/REUTERS
Microsoft Corp.
MSFT -2.25%
cut sales and earnings guidance for the current quarter, citing the impact of foreign exchange rates as the stronger U.S. dollar takes a toll.
The software giant said in a securities filing Thursday that it now expects fiscal fourth-quarter sales of between $51.94 billion and $52.74 billion, down from its prior guidance of $52.4 billion to $53.2 billion. The quarter ends June 30.
Earnings are expected to be between $2.24 a share and $2.32 a share, down from prior guidance of $2.28 a share to $2.35 a share.
Microsoft shares fell 2.5% in early trading to $265.60. They are down nearly 21% year to date.
Economic weakness in other parts of the world has helped propel the U.S. dollar to multi-decade highs against its trading partners, which comes as U.S. inflation is at or near its highest level in nearly 40 years. The U.S. Dollar Index, which tracks the currency against a basket of others, is up more than 6% so far this year and hit its highest level since 2002 last month. The greenback’s climb has sent the euro, British pound and Japanese yen tumbling.
A strong dollar allows Americans to buy goods from other countries at lower prices. But it can also hurt U.S. manufacturers by making products more expensive for foreigners, and it means U.S. businesses receive fewer dollars for their exports.
Microsoft said in its earnings report earlier this month that a stronger dollar reduced the software company’s revenue, even though it notched higher profits last quarter.
Microsoft is the latest multinational giant to warn of the stronger dollar’s impact on financials.
Salesforce Inc.
earlier this week cited the stronger dollar in lowering its sales outlook for the year. The business-software company doubled the impact that it expects this year from the stronger dollar to $600 million from its $300 million forecast in March.
“I think the dollar might have even had a stronger quarter than we did,” Salesforce Co-Chief Executive
Marc Benioff
said on the company’s conference call Tuesday.
This article will be updated.
Write to Will Feuer at will.feuer@wsj.com
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8