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Microsoft ( MSFT ) stock tanked on Friday, slicing through its 50-day moving average, after the company missed March-quarter targets for sales and earnings and guided June-quarter sales nearly $1 billion below views. Microsoft was down nearly 7%, near 52, in midday trading on the stock market today . It ended the regular session Thursday at 55.78, within spitting distance of its all-time high of 56.85, reached on Dec. 29. IBD’s Take: How healthy is Microsoft’s stock, and how does it compare to rivals? Find out at IBD Stock Checkup Late Thursday , the Redmond, Wash., software leader said it earned 62 cents a share excluding items, flat with the year-earlier period, on sales of $22.08 billion, up 2%, for its fiscal third quarter ended March 31. Analysts polled by Thomson Reuters expected 64 cents EPS and $22.09 billion in sales. Q3 EPS would have been 66 cents without a tax adjustment. For the current quarter, Microsoft expects sales of $22.05 billion, at the midpoint of its guidance. That would be down slightly from $22.18 billion in the year-ago quarter, and it’s almost $1 billion below the $23.04 billion modeled by Wall Street. It did not give an EPS target. Microsoft’s fiscal Q3 results were in line to slightly ahead of estimates after adjusting for a higher-than-expected tax bill, Jefferies analyst John DiFucci said in a research report. But Microsoft’s fiscal Q4 guidance was below consensus in every business segment, he said. The implied EPS for Q4 was almost 10 cents below the consensus estimate of 66 cents a share, he said. DiFucci rates Microsoft stock underperform, with a price target of 40. “Management spoke of macro weakness, a topic we do not expect many companies to blame, other than those that are simply not doing well in the market, or where expectations are overly optimistic,” he said. “Given the high percentage of annuity business, we believe the business momentum is even worse that implied in the revenue shortfall predicted in guidance.” Microsoft faces meaningful risks associated with its continued dependence on the PC business and increased competition in the cloud computing market, DiFucci said. Windows PC sales continue to be weak, a situation that also hurt March-quarter results for chipmaker Intel ( INTC ). Cowen analyst Gregg Moskowitz called Microsoft’s results and guidance “uninspiring.” He reiterated his market perform rating on Microsoft stock but lowered his price target to 58 from 59. UBS analyst Brent Thill maintained his buy rating and price target of 60 on Microsoft stock. The company’s cloud-based businesses, including Azure and Office 365, continue to exhibit strong performance and Microsoft is seeing strong renewals and ARPU (average revenue per user), he said. RBC Capital Markets analyst Ross MacMillan maintained his outperform rating on Microsoft stock, but cut his price target to 61 from 63. Image provided by Shutterstock . Scalper1 News
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