Microsoft updates Q3 FY20 guidance as coronavirus outbreak to impact Windows OEM and Surface revenues

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Yesterday, the markets took a dive as fears of a spreading coronavirus shook investor confidence in international business. As the spread of the virus makes its way into parts of central Asia and Europe, more areas are being quarantined and as a result, businesses are beginning to feel the impact of a reduced chain of supply.

Among the many businesses with international interests and investments is Microsoft, which issued an update to its Q3 FY20 guidance.

At the end of January, Microsoft prepared investors on an earnings call for a quarter where its More Personal Computing division would pull in a reasonable $10 to $11 billion in revenue. During that call, Microsoft explained the projections were taking into account growing concerns about the relatively nascent COVID-19.

Now it seems things have gotten a bit dire with regards to its supply chain and the company is alerting investors that its projection will like slip for the quarter.

Microsoft declined to pinpoint a number in their press release about the updated guidance and instead offer this statement,

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.

As expected, Microsoft plans to continue to conduct business in accordance with the World Health Organization (WHO) guidelines as well as “ensure the health and safety of our employees.”

The world continues to grapple with the expediency in which COVID-19 is spreading and its direct and indirect effects on global business. We should expect to see many more of these types of adjustments in the coming days.