clock menu more-arrow no yes

Filed under:

Microsoft says Windows and Surface businesses will miss expectations due to coronavirus

The company says its supply chain has been slowed

Illustration by Alex Castro / The Verge

Microsoft said late on Wednesday that it would miss the third quarter guidance it set out earlier this year for its personal computing segment, which includes money it makes from licensing Windows and selling Surface devices. The culprit, as is the case with many other tech companies, is supply chain slowdowns due to the effects of the coronavirus outbreak. The company said it does not expect other divisions to be affected.

“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 press release. The company did not give a specific revenue range for the segment; instead, it said it does “not expect to meet our More Personal Computing segment guidance as Windows OEM and Surface are more negatively impacted than previously anticipated.”

During its earnings call last month, Microsoft issued quarterly revenue guidance for the personal computing segment between $10.75 billion and $11.15 billion. This guidance “included a wider than usual range to reflect uncertainty related to the public health situation in China,” according to the company. In its second quarter, Microsoft had revenue of $36.9 billion and a profit of $11.6 billion. Surface revenue for the quarter was up 6 percent year over year to $1.9 billion.

Microsoft said on Wednesday that it was working with global health authorities to ensure the safety of its employees overseas, and it has donated to coronavirus relief efforts.