Microsoft Cuts Revenue Guidance On Coronavirus Outbreak

The company says the reduced outlook comes from its personal computing segment, including Windows OEM and Surface.


Microsoft on Wednesday disclosed that it no longer expects to achieve its revenue guidance for its current quarter as a result of the coronavirus epidemic.

The company's personal computing segment, including its Windows OEM and Surface devices businesses, are the areas seeing an impact related to the outbreak, Microsoft said. "All other components of our Q3 guidance remain unchanged," the company said.

[Related: Coronavirus Crisis: The IT Industry Prepares For The Worst]

Sponsored post

Microsoft’s stock fell 1 percent to $168.35 in after-hours trading on Wednesday.

The company did not say specifically how its actual quarterly revenue might differ from its guidance. Microsoft previously provided guidance of between $10.75 billion and $11.15 billion in revenue for its fiscal third quarter, which runs through the end of March. China, where the coronavirus outbreak has been focused, is a manufacturing hub for PC makers.

"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 Q2 earnings call," Microsoft said in a news release. "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 guidance reduction follows similar disclosures from device makers Apple and HP Inc.

Apple said last week that it no longer expects to achieve its revenue guidance for its current quarter as the coronavirus epidemic takes a toll on iPhone production and sales in China. Then this week, HP announced it has factored in an 8-cent impact to its earnings per share guidance for its current quarter.

Still, "we view the impact as temporary, with limited impact to our second half" from the coronavirus outbreak, HP CFO Steve Fieler said Monday during the company's quarterly call with analysts.

Global stock markets have plunged this week amid concerns over the growing number of coronavirus cases outside of China.