Microsoft Lowers Revenue Expectations Due to Coronavirus Supply Delays
Microsoft announces it will miss quarterly revenue guidance for its Windows-heavy segment as supply chain recovery slows. The tech giant joins Apple in feeling the financial sting of the COVID-19 outbreak.
Microsoft shares drop two percent in extended trading after the company reveals it will not meet its quarterly revenue guidance for the More Personal Computing segment. This division, which accounts for 36 percent of total revenue, includes Windows, Surface devices, and gaming. The warning stems directly from ongoing disruptions tied to the coronavirus outbreak.
The company explains that customer demand for Windows remains strong but that the supply chain is returning to normal operations much slower than originally anticipated. As a result, both Windows OEM licensing and Surface hardware face worse impacts than previously expected. Microsoft does not provide updated financial targets but confirms that guidance for its other business segments stays intact.
This announcement makes Microsoft the latest major tech firm to adjust expectations because of the virus, following similar warnings from Apple and HP. The ripple effects of the production slowdown immediately impact other industry players, with Intel and Dell stocks also falling in after-hours trading. Microsoft shares are already down nearly five percent over the past week amid broader market fears.