Microsoft to miss sales forecast due to COVID-19 outbreak

After Apple, Microsoft has revised its revenue guidelines for its January-March quarter owing to Coronavirus (COVID-19) outbreak, saying the supply-chain has been slowed down which will impact its Windows and Surface businesses.

In a statement, the company said although it sees strong Windows demand in line with its expectations, "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 said late Wednesday.

On January 29, Microsoft issued quarterly revenue guidance for its 'More Personal Computing' segment between $10.75 and $11.15 billion, which included a wider than usual range to reflect uncertainty related to the public health situation in China.

"As the conditions evolve, Microsoft will act to ensure the health and safety of our employees, customers, and partners during this difficult period," said the company, adding that it would continue to partner with local and global health authorities to provide additional assistance.

In its second quarter (October-December period), Microsoft reported revenue of $36.9 billion and a profit of $11.6 billion. Surface revenue for the quarter was up 6 per cent (year over year) to $1.9 billion.

Apple last week warned that coronavirus outbreak will affect its business in the January-March quarter as worldwide iPhone supply will be temporarily constrained.

"Work is starting to resume around the country, but we are experiencing a slower return to normal conditions than we had anticipated. As a result, we do not expect to meet the revenue guidance we provided for the March quarter due to two main factors," the company said in a statement.