Microsoft is having an incredibly hard day in the market today, and for good reason. Unfortunately, the company reported earnings below expectations, and investors aren't taking the miss lightly. Today, we'll talk about what we saw from the earnings report, how the market is reacting to the news, what we can expect to see from Microsoft moving forward, and how binary options traders can take advantage of the trends. So, let's get right to it…
Microsoft Reports Earnings
Microsoft released its earnings yesterday after the closing bell for the third fiscal quarter. While the earnings report was expected, no one expected that the company would miss analyst projections. Here's what we saw from the report…
Top Line Revenue – When it comes to top line revenue, Microsoft produced upsetting results. In the quarter, the company reported revenue in the amount of $22.08 billion. While this sounds like quite a bit of money, the company was millions of dollars away from analyst projections at $22.11 billion.
Earnings – In terms of earnings, Microsoft disappointed investors as well. The company reported its earnings at $0.62 per share. This was $0.02 below what analysts expected to see at $0.64 per share.
As you can see from the data above, Microsoft missed the mark when it comes to both earnings and revenue. However, Microsoft's CEO, Satya Nadella has a strong belief that organizations looking to use digital technology will help to drive future growth. Here's what Nadella had to say…
“Organizations using digital technology to transform and drive new growth increasingly choose Microsoft as a partner… As these organizations turn to us, we're momentum across Microsoft's cloud services and with Windows 10.”
How The Market Reacted To The News
As binary options traders, we know that the news moves the market. Any time there is positive news released with regard to a publicly traded company, we can expect to see gains in the value of the company as a result. Adversely, when negative news is released, we can expect to see declines. Not to mention, few things get investors quite as excited as earnings. So, with Microsoft producing less than expected in terms of both revenue and earnings, we're seeing strong declines in the value of the stock at the moment. Currently (3:11), the stock is trading at $51.97 per share after a loss of $3.81 per share or 6.82% thus far today.
What We Can Expect To See Moving Forward
In the short term, the value of Microsoft is likely to continue falling. After all, investor fear with regard to poor earnings is likely to weigh heavy on the stock for at least a few trading sessions. However, in the long run, I do have a relatively bullish opinion with regard to what to expect. The reality is that Microsoft is taking a large share of the cloud computing market and is well known as a software developer. In the long run, the profits from these markets will likely lead to big gains for the stock.
How Binary Options Traders Can Take Advantage Of The Trends
At the moment, the best bet for binary options is to watch for strong put option opportunities. After all, fear among investors will likely send the value of the stock downward. However, it's also important to watch for a reversal. Microsoft is a strong company and investors know it! When the stock nears the support trend line, it will be time to start looking for call options.
What Do You Think?
Where do you think Microsoft is headed and why? Let us know your opinion in the comments below!
[Image Courtesy of Wikipedia]