Microsoft’s quarter depresses Wall Street. At around 3.35 pm Italian time, the Dow Jones fell by around 240 points (-0.71%), the S&P 500 and the Nasdaq lost 1.20% and 1.80% respectively. Microsoft stock slips 4%.
But not only Microsoft: pending the publication of the accounts by the electric car giant Tesla managed by Elon Musk, attention is focused on the securities of other companies which, before the start of the session on Wall Street, published their quarterly.
The Boeing stock suffers from a lackluster quarter, characterized by profits and turnover which, during the fourth quarter, disappointed analysts’ estimates. The aerospace giant also motivated the trend with the problems that continue to affect the supply chains, and which translate into a delay in the deliveries of key components for the corporate world.
Also featured in this session were News Corp and Fox News, both rising on news that tycoon Rupert Murdoch has declined to proceed with a merger between the two companies due to shareholder opposition.
However, the attention of market operators is directed above all to the Microsoft stock, which leaves 2.6% on the ground.
The sentiment is weighed down by the quarterly released by the giant, published yesterday after the end of the trading day.
MSFT stock initially toasted to better-than-expected earnings releases. Shortly thereafter came the about-face, which still continues, due to the not very comforting outlook issued by Big Tech USA: an outlook that confirms the slowdown in the PC market and also in cloud services.
Microsoft announced it ended its fiscal second quarter — the fourth quarter of 2022 ended Dec. 31 — with net income down to $16.43 billion, compared with $18.77 billion in the same period a year earlier.
A $1.2 billion charge weighed on Big Tech US’s quarterly report, which includes $800 million of liquidation costs that the group had to incur for the 10,000 announced workforce cuts.
Adjusted earnings per share came in at $2.32 per share, better than the $2.29 expected by analysts polled by Refinitiv.
Microsoft’s total revenue climbed 2% year over year, posting the lowest growth since 2016 at $52.75 billion, just shy of the $52.94 billion estimated by analysts.
The outlook for Microsoft’s third fiscal quarter, first quarter of 2023, is not very convincing: the giant has announced that it expects revenues between $50.5 billion and $51.5 billion, which it expects to grow by up to 3%, however lower than to the $52.43 billion analyst consensus estimate.
So far, more than 70% of companies trading on the S&P 500 have released earnings reports for the fourth quarter of 2022, with 65% beating expectations, according to analysis by Refinitiv.
The downtrend in futures follows a third consecutive session of gains for the Dow Jones.
All three major stock indexes are up at least 1% since the start of the week.
Today is Tesla Day, the day on which, after the end of the session on Wall Street, the giant founded and led by CEO Elon Musk will release the financial results for the fourth quarter of 2022.
On January 2, the company released data on electric vehicle sales for the last three months of 2022, which remained disappointing.
The subsequent announcement of further price cuts stoked fears that Big Tech was coping with slowing demand for its cars.
In the United States, the base version of Tesla’s Model 3 currently sells for $44,000, $3,000 less than it was paying at the end of November.
Investors to attention, after the tumble of the TSLA title, in 2022, equal to -65%.
The start of the new year was comforting for shares of the EV giant, which shot up 17% YTD through yesterday’s session.
According to TheStreet.com, analysts expect Tesla to adjust EPS of $1.13 for the fourth quarter, up 33% year over year, on revenue of $24.03 billion, an increase equal to to 35% year over year, which would confirm the slowest growth of Tesla car sales in more than two years.
Returning to the US stock exchange, yesterday the Dow Jones ended the session up 104.40 points (+0.31%), at 33,733.96; the S&P 500 fell 0.07% to 4,016.95, while the Nasdaq Composite lost 0.27% to 11,334.27.
In the fixed income market, 10-year Treasury rates fell to 3.447%, while two-year yields fell to 4.141%.