MSFT Microsoft Corporation

By Micah Maidenberg 

Microsoft Corp. warned that supply-chain disruptions from the coronavirus outbreak would dent this quarter's sales, the second major tech company after Apple Inc. to lower expectations because of the public-health crisis in China.

Microsoft on Wednesday said sales for the personal-computing business are expected to fall short of the previous revenue forecast of $10.75 billion and $11.15 billion. It didn't give a new outlook. The affected segment includes Windows software, Surface tablets and Xbox gaming hardware and generated about 35% of Microsoft sales in the previous quarter.

Shares in Microsoft fell 1.65% in after-hours trading following the disclosure.

Apple this month lowered its earnings outlook because of the coronavirus outbreak which, the company said, limited iPhone production for world-wide sales and curtailed demand for its products in China. Apple said this quarter's sales would fall short of the projected range of between $63 billion and $67 billion and provide more information when it holds its earnings call in April.

Other tech companies also have highlighted increased uncertainty over their business prospects because of the situation, which has kept some factories in China closed and dented demand. Graphics chip maker Nvidia Corp. this month said it expected a $100 million hit to this quarter's earnings. Personal computer maker HP Inc. last week said this quarter's earnings would be affected, but the company didn't necessarily see a longer-term impact with Chinese factories resuming work.

Microsoft said sales of products including the Surface device and Windows have been hit harder than the company expected.

"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 its fiscal second-quarter earnings call, Microsoft said in a statement.

Microsoft Chief Financial Officer Amy Hood on that earnings call last month said the revenue forecast for the personal-computing business was wider than usual because of uncertainty tied to the coronavirus outbreak in China.

Write to Micah Maidenberg at micah.maidenberg@wsj.com

(END) Dow Jones Newswires

February 26, 2020 18:48 ET (23:48 GMT)

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