Global Economy

Microsoft warns it will miss guidance for segment that includes Windows because of coronavirus

Satya Nadella speaking at the 2016 World Economic Forum in Davos, Switzerland.

David A. Grogan | CNBC

Microsoft shares fell 2% in extended trading on Wednesday after the company said it doesn’t expect to meet the quarterly revenue guidance it previously provided for the segment that includes Windows.

The move comes a week after Apple disclosed that it did not expect to reach its own quarterly revenue guidance as a result of impact from the virus. Earlier this week HP, one of the biggest companies selling Windows PCs, said that corporate updates to Windows 10 could slip into future quarters.

“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 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. All other components of our Q3 guidance remain unchanged.”

Microsoft’s guidance for the segment for the quarter, at $10.75 to $11.15 billion, was wider than usual specifically because of the public health situation that had been emerging in China. The company said its other guidance for the fiscal third quarter still stands.

The More Personal Computing Segment accounted for about 36% of total revenue and about 30% of operating income in the fiscal second quarter. In addition to Windows, it includes Surface, PC accessories, gaming, search and MSN advertising.

Shares of Intel, whose chips go in Windows PCs, moved 1% lower in extended trading after Microsoft made the announcement.

This is breaking news. Please check back for updates.


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