Friday’s Headlines: Microsoft Slashes Its Outlook
Here were the biggest movers in the MyWallSt shortlist yesterday:
Moving Up ⬆️
Pure Storage (PSTG) +18.2%
Veeva Systems (VEEV) +14.7%
nCino (NCNO) +14.6%
Datadog (DDOG) +12.9%
Upstart Holdings (UPST) +12.5%
Moving Down ⬇️
Duluth Trading (DLTH) -2.6%
Calavo Growers (CVGW) -1.3%
IMAX (IMAX) -0.1%
ShotSpotter (SSTI) -0.1%
TrueCar (TRUE) +0.3%
There will be no Market Headlines on Monday, June 6 as a result of a Bank Holiday in Ireland.
1. Microsoft (MSFT) slid by as much as 3.8% yesterday before recovering following the Big Tech firm lowering its fiscal fourth-quarter guidance. An investor slide deck revealed that unfavorable exchange rate movement had forced the company to reduce its outlook. Previously, Microsoft had been expecting revenue of between $52.4 billion and $53.2 billion. Now, those figures have been revised to between $51.94 billion and $52.74 billion for the quarter. Earnings forecasts were also trimmed slightly, but this cut had been foreshadowed by CFO Amy Hood as recently as April. The strong performance of the dollar has sent the prices of US goods skywards abroad, weakening demand in many places. With Microsoft generating close to 50% of its revenue outside of the US, any hit to this will have a significant impact on its books. Microsoft is not alone, however, with companies such as Snap and Salesforce both trimming sales outlooks in the wake of the dollar’s strength. Read more here.
2. Ford (F) announced yesterday that its recent decline in sales has narrowed significantly. The automaker had seen its sales slashed by over 20% in February and March respectively, before continuing to drop by over 10% in April. Its figures for May show that sales were only down 4.5% on the year-ago quarter, despite the Detroit-based firm estimating that overall new vehicle sales in the US are down roughly 30%. Ford appeared to be gaining a higher proportion of the market share as demand for its pickups trucks and relatively new electric line stays strong. With supply chain issues still hammering the auto industry, Ford has prioritized the production of its newest models in an attempt to sate its customers. Its even gone as far as incentivizing buyers who are willing to place an order but wait longer for it to be delivered. Read more on the story here.
3. Veeva Systems (VEEV) beat analyst expectations in its Q1 2023 earnings call yesterday. The company’s adjusted earnings per share (EPS) of $0.99 surpassed analyst estimates by 7.6%. This resulted in a 14.6% increase in the company’s share price by the end of trading on Thursday. The cloud-computing company also slightly raised its revenue forecast for the fiscal year in a real showing of strength following this earnings call. It must be noted, however, that with the strengthening of the US dollar (USD), companies like Veeva are reporting lower revenues from foreign operations. More than 80% of the company’s revenue is billed in USD. CFO Brent Bowman stated, “in the last 90 days, however, FX movements have been larger than normal and warrant a specific callout.” Read more here.
Get this week’s full earnings calendar here.