Microsoft downgrades Windows and Surface outlook on coronavirus outbreak
Microsoft has said it won’t meet parts of its quarterly guidance following the coronavirus outbreak.
The downgrade relates to its More Personal Computing segment, which Microsoft had previously forecast to report between $10.75bn (£8.33bn) and $11.15bn in revenue for the upcoming quarter.
“Although we see strong Windows demand in line with our expectations, the supply chain is returning to normal operations at a slower pace than anticipated at the time of our [second-quarter] earnings call,” the company said in a statement.
“As a result, for the third quarter of fiscal year 2020, we do not expect to meet our More Personal Computing segment guidance as Windows OEM and Surface are more negatively impacted than previously anticipated.”
The prediction in January had already factored in a wider than usual range “to reflect uncertainty related to the public health situation in China”.
Microsoft said all other parts of its quarterly guidance remain unchanged. It did not provide updated figures for the affected segments.
The spread of coronavirus has rocked many of the major tech firms, whose supply chains have been disrupted as workers in key production regions such as Asia have been unable to return to work while under quarantine.
Earlier this month, Apple downgraded its revenue forecast of between $63bn and $67bn for the three months to the end of March. Since then, global markets have suffered under the virus’ impact, with this week alone seeing Wall Street indices erase all of their 2020 gains.
The coronavirus outbreak, believed to have originated in a market selling wildlife in the central Chinese city of Wuhan late last year, has infected about 80,000 people and killed more than 2,700, the vast majority in China.
The company’s statement continued: “As the conditions evolve, Microsoft will act to ensure the health and safety of our employees, customers, and partners during this difficult period. We will also continue to partner with local and global health authorities to provide additional assistance.
“We deeply appreciate the commitment of the people and organisations that have united to address this health emergency; our thoughts are with all those affected across the world.”
Microsoft shares dipped only slightly in extended trading, falling 0.57 per cent.