Microsoft lowers there guidance on unfavorable forex impact

In a premarket announcement, Microsoft - a market bellwether - has lowered their guidance for revenues and earnings on the back of unfavorable foreign-exchange impact.

• They now see revenues at 51.94B to 52.74B vs the streets estimate of 52.87B
• EPS is seen at $2.24 to $2.32 vs. streets estimate of $2.33

Microsoft shares are trading down -$6.67 or -2.45% in premarket trading.

Meanwhile the major indices are also taking a dip. The futures are implying:

• Dow industrial average up 23 points
• NASDAQ index -32 points
• S&P index -3.43 points

The USD in 2022, has moved up 6.7% at current levels. It was up 9.76% at the highs on May 13. Companies with overseas profits when they remit the dollars back to the US, sell the foreign currency Foreign Currency Foreign currency is simply the legal tender of any foreign country approved by the nation’s government to be circulated within its borders. For example, the US dollar ($), which is the currency of the United States of America, would be classified as a foreign currency when being imported into or handled inside the United Kingdom, whose national currency is the British pound (£).Nearly every country, at least in practice, has its own currency. The main exception is that of the euro, which is the Foreign currency is simply the legal tender of any foreign country approved by the nation’s government to be circulated within its borders. For example, the US dollar ($), which is the currency of the United States of America, would be classified as a foreign currency when being imported into or handled inside the United Kingdom, whose national currency is the British pound (£).Nearly every country, at least in practice, has its own currency. The main exception is that of the euro, which is the Read this Term at a lower level and have to pay a higher USD level.

If the USD moves lower (as it has) of late at least, companies may claw back some of the effects on their future earnings, but who knows, maybe MSFT bought the USD at the highs in anticipation of an even higher USD. I don't know.

However, the impact was such to cause MSFT to announce the unfavorable impact.