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Microsoft Admits Coronavirus Impact Worse than Expected

"More negatively impacted than expected"

By CBR Staff Writer

Microsoft has downgraded its revenue guidance owing to the coronavirus outbreak, saying shipments by Original Equipment Manufacturers (OEMs) making personal computers running Windows, and production of its own Surface line, are “more negatively impacted than previously anticipated”

The company is the latest to warn of the impact from the burgeoning Covid-19 epidemic, following Apple on February 17, which said that it was experiencing “slower return to normal conditions than we had anticipated”. (The company was referring to conditions at iPhone manufacturing partner sites, as well as consumer demand in China as stores remain closed across the country).

Microsoft Coronavirus Impact

Microsoft said in an investor update late Wednesday: “The supply chain is returning to normal operations at a slower pace than anticipated at the time of our Q2 earnings call. 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.”

The company had issued unusually wide revenue guidance for its More Personal Computing segment of between $10.75 billion – $11.15 billion on January 29, amid uncertainty at the impact of the virus outbreak.

It did not provide upgraded guidance.

Redmond added: “As the conditions evolve, Microsoft will act to ensure the health and safety of our employees, customers, and partners.”

Maritime intelligence provider Lloyd’s List says the coronavirus outbreak is “convulsing every segment of the shipping industry” (often a litmus test for broader real economy impact of an emerging issue) “including container shipping, dry bulker, tanker, port, shipbuilding and banking.”

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