Microsoft issue profit warning due to reduced PC sales

Microsoft has updated its financial guidance for this quarter (their FY Q3 2020) due to the impact of the Coronavirus on the sale of PCs by OEMs.

Microsoft says that despite strong Windows demand, “the supply chain is returning to normal operations at a slower pace than anticipated” and therefore “we do not expect to meet our More Personal Computing segment guidance.”

Microsoft notes that both PC sales and Surface sales were negatively affected, but that “all other components of our Q3 guidance remain unchanged.”

Read the full note below:

REDMOND, Wash. — Feb. 26, 2020 — As Microsoft closely monitors the impact of the COVID-19 health emergency, our top priority remains the health and safety of our employees, customers, partners, and communities. Our global health response team is acting to help protect our employees in accordance with global health authorities’ guidance. Worldwide, Microsoft employees are working to support organizations addressing the challenges on the ground. Microsoft also continues to make donations to relief and containment efforts, including directly providing technology to help hospitals and medical workers.

On Jan. 29, as part of our second quarter of fiscal year 2020 earnings call, we issued quarterly revenue guidance for our 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. 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 the conditions evolve, Microsoft will act to ensure the health and safety of our employees, customers, and partners during this difficult period. We will also continue to partner with local and global health authorities to provide additional assistance. We deeply appreciate the commitment of the people and organizations that have united to address this health emergency; our thoughts are with all those affected across the world.

Via Neowin