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Microsoft becomes the latest corporate victim of coronavirus chaos

Laurence Dodds
A smartphone with the Microsoft Bing logo is displayed against the backdrop of a Chinese flag in this picture illustration taken January 24, 2019 - Dado Ruvic/Ruters

Microsoft has announced that it will miss some of its revenue projections for the coming summer due to the effect of the coronavirus on its Chinese supply chain, becoming the latest US tech firm to be rocked by the deadly epidemic.

Shares in the Seattle-based company fell by as much as 2.5pc in after-hours trading following its announcement that its personal computer division, which includes Surface tablets and Windows licences sold to PC makers, would not meet its targets.

That division accounted for about 35pc of Microsoft's revenue in the spring of 2019, suggesting the damage to its bottom line this time may be significant. The company did not give updated predictions.

It comes one week after Apple, Microsoft's longtime rival in the personal computer market, said that it would miss is company-wide revenue predictions because the virus had frozen its Chinese factories and suppressed consumer demand in the country.

In a statement that used almost identical language to Apple's, Microsoft said: "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.

" 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 and Surface are more negatively impacted than previously anticipated.

"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."

The company had previously said that it expected to make between $10.7bn (£8.3bn) and $11.1bn, an already wider than usual range due to the chaos inflicted by the disease.

Microsoft builds its Surface tablets in China, and also sells Windows licences to PC manufacturers who make their products in the country. The company is reportedly scrambling to move its supply chain to Vietnam.

The virus, technically known a Covid-19, has sparked a plague of corporate profit warnings as it threatens to paralyse economies across the world. On Tuesday, the Dow Jones economic index fell by 900 points after US health officials warned that the spread of Covid-19 domestically was now a question of "when, not if".