Microsoft stock seesawed on Thursday after the software giant lowered its revenue and earnings forecasts for the current quarter. Microsoft (MSFT) blamed foreign exchange headwinds for the negative revision.
XThe Redmond, Wash.-based company sees a $460 million revenue impact from foreign exchange in the June quarter. It believes foreign exchange rates will reduce its per-share earnings by 3 cents.
Microsoft now expects revenue of $51.94 billion to $52.74 billion, compared with its previous outlook of $52.4 billion to $53.2 billion. The midpoint is now $52.34 billion vs. the prior target of $52.8 billion.
Microsoft cut its per-share earnings range to $2.24 to $2.32, compared with its previous outlook of $2.28 to $2.35. The midpoint is now $2.28 vs. the prior target of $2.31 for the fiscal fourth quarter.
Microsoft Stock Seesaws After Update
In morning trades on the stock market today, Microsoft stock dropped as much as 4%. But it reversed amid a broad market rally. It ended the regular session up 0.8% to 274.58.
Microsoft gave its previous outlook on April 26 when it reported better-than-expected results for its fiscal third quarter.
Mizuho Securities analyst Gregg Moskowitz reiterated his buy rating on MSFT stock with a price target of 350.
"Microsoft's fundamentals remain intact, and we remain confident that growth opportunities over the medium-term and beyond are greater than many realize," he said in a note to clients Thursday.
IBD Stock Checkup ranks Microsoft stock as first out of seven stocks in IBD's desktop software industry group. But it has a so-so IBD Composite Rating of 74 out of 99. IBD's Composite Rating is a blend of key fundamental and technical metrics to help investors gauge a stock's strengths. The best growth stocks have a Composite Rating of 90 or better.
Microsoft stock has a mediocre IBD Relative Strength Rating of 59 out of 99. That means it has outperformed 59% of stocks over the past 12 months. In a negative sign, it is trading beneath its 50-day and 200-day moving average lines.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
YOU MAY ALSO LIKE:
Chipmaker Semtech Tops First-Quarter Targets, Predicts Higher Earnings
HP Stock Rises After PC Maker Beats Quarterly Targets
'Stranger Things' Return Isn't Boosting Netflix Subscriber Count: Analyst
Best Growth Investments To Buy And Watch: See Updates To IBD Lists
Join IBD Live For Investing Ideas Each Morning Before The Open
