Feb 26, 2020 - Technology

Microsoft says PC unit will fall short of guidance due to coronavirus

In this image, a woman walks past a Microsoft store

Photo: Nicolas Economou/NurPhoto via Getty Images

Microsoft does not expect its PC unit, which includes Windows and Surface, to meet its previous quarterly revenue guidance due to the impact of the coronavirus on computer production, the company said in a Wednesday statement.

Our thought bubble, via Axios' Ina Fried: It's PC supply, not demand, that is below expectations, as the supply chain — much of which is in China — has been slower to return to full production.

  • Apple warned last week that it would miss estimates, citing the dual impact of the coronavirus both slowing hardware production and decreasing demand in China as consumer spending slowed.

Where it stands: 69% of U.S. consumers are concerned about the coronavirus outbreak's impact on the U.S. economy, according to a Morning Consult poll conducted from Feb. 24–26.

  • Roughly 2,000 adults were surveyed by Morning Consult with a margin of error of ±2%.

What they're saying:

"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."
— Microsoft's statement

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