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Microsoft warns Windows, Surface won't hit revenue guidance due to coronavirus

Surface Pro X display
Surface Pro X display (Image credit: Daniel Rubino/Windows Central)

What you need to know

  • Microsoft expects to miss its third quarter guidance for its "More Personal Computing" segment.
  • The reason for Microsoft's warning is the lingering impact of coronavirus on its supply chain.
  • More Personal Computing encompasses Microsoft's Surface and Windows businesses.

Microsoft issued a warning today that it doesn't expect to meet its guidance for Windows OEM and Surface revenues when it reports results for its third fiscal quarter. The cause, Microsoft says, is the effect of coronavirus on the operations of its supply chain, which are returning to normal at a "slower pace than anticipated."

From Microsoft:

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. 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.

Yesterday, Microsoft also announced the cancellation of a Hong Kong Ignite event due to coronavirus.

In its second fiscal quarter results, Microsoft projected that its More Personal Computing segment would hit revenues between $10.75 and $11.15 billion. In its statement today, Microsoft said that guidance "included a wider than usual range to reflect uncertainty related to the public health situation in China."

In its Q2 earnings reported last month, Microsoft's More Personal Computer revenues were up two percent to $13.2 billion. Within that, Surface revenue grew six percent to nearly $2 billion.

Microsoft isn't the only major company to experience difficulties due to ongoing coronavirus concerns. In a bid to contain the virus, China shut down factories during the outbreak's peak, though operations are beginning to recover as the virus' spread appears to be on a downward trend in the country. However, coronavirus concerns have grown around the globe as coronavirus' transformation into a pandemic looks likely.

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Dan Thorp-Lancaster is the Editor in Chief for Windows Central. He began working with Windows Central as a news writer in 2014 and is obsessed with tech of all sorts. You can follow Dan on Twitter @DthorpL and Instagram @heyitsdtl. Got a hot tip? Send it to daniel.thorp-lancaster@futurenet.com.

9 Comments
  • Yes, it is effecting all manufactures so that is expected. 😌
  • A good year to fire up Surface Due and Neo I guess.
  • Corona virus outbreak is also a good tool for revenue cosmetics.
  • This!
    Take some charges now while everyone is so forgiving and the hit on your stock is reduced.
    Then enjoy benefits in the following quarter of having taken those charges and see your stock increase.
    I'm not saying the effects aren't real, but there is a way to leverage the present climate to your advantage as well. smoke and mirrors / shell games
  • Just when they managed to get a decent anti-virus going in Windows Defender, alas it does not defend against coronavirus.
  • Are other big tech companies missing previous estimates due to Covid-19?
  • Most definitely.
    China is a huge tech supplier.
  • Does anyone use the Surface Pro X?
  • I do. Daily.