Microsoft (MSFT) - Get Report announced Wednesday afternoon that it does not expect to met third quarter guidance for one of its business segments, as the company is allowing employees working in China to stay home, sending the stock down marginally.
The stock fell 0.8% to $169 a share.
Microsoft said "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 said the supply chain for some of its customers is returning to production at a slower pace than anticipated.
Microsoft also has employees located in China working on the personal computing business. The company said, “Our top priority remains the health and safety of our employees, customers, partners, and communities.”
Third quarter guidance for personal computing was for a range between $10.75 billion and $11.15 billion, which is roughly one-third of the company’s total revenue. But the segment is growing at roughly 2% a year. Combined with the company’s fast-growing cloud segments, personal computing will be much less than 30% of Microsoft’s total revenue in due time.
Also, Microsoft is already down 9% in the past five days, as the broader market has roiled due to the spread of the virus.
Real Money's Rev Shark breaks down how the coronavirus could impact Microsoft going forward.