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Microsoft misses estimates but stock up 5% on rosy guidance


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Satya Nadella, chief executive officer of Microsoft Corp., appears at a panel session at the World Economic Forum in Davos, Switzerland, on May 24, 2022.
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Microsoft will announce its fiscal fourth-quarter results after markets close on Tuesday.

Here’s what analysts are looking for:

Earnings: $2.29 per share, adjusted, as expected by analysts, according to Refinitiv.Revenue: $52.44 billion as expected by analysts, according to Refinitiv.

During the quarter, Microsoft reduced its quarterly guidance for income and revenue because of changing foreign-exchange rates. Satya Nadella said employees will get pay increases, and the company introduced services to help customers deal with security incidents.

When management lowered earnings expectations, though, it didn’t factor in other issues that could hurt results.

Technology industry researcher Gartner said earlier this month that logistical disruptions in the quarter had dragged down PC shipments, a key input for sales of Windows operating system licenses to device makers. Plus, macroeconomic worries that hurt revenue growth for advertising-driven social-media companies Snap and Twitter could rub off on Microsoft. In 2021 the company generated $10 billion in advertising revenue before traffic-acquisition costs.

Microsoft shares have sold off 25% so far this year, compared with a decline of 17% for the S&P 500 U.S. stock index.

Executives will discuss the results with analysts and issue guidance on a webcast starting at 5:30 p.m. ET.

This story is developing. Please check back for updates.

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