Microsoft says it won't meet its sales forecast for the upcoming quarter due to the impacts of coronavirus

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  • Microsoft said it will fall short of its sales forecast for the upcoming quarter due to the continued spread of coronavirus.
  • The "uncertainty related to the public health situation in China" has impacted Microsoft's Windows and Surface hardware businesses, Microsoft said.
  • The forecasts for other parts of Microsoft's business are unchanged. Microsoft shares were down around 2 percent in after-hours trading following the announcement to around $167 per share.
  • Meanwhile, Microsoft could be to move at least production of its Surface devices out of China due to the virus, according to a report from Nikkei Asian Review citing unnamed sources. Microsoft declined to comment on the report.
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Microsoft on Wednesday said it will miss its sales forecast for the upcoming quarter due to the impact of coronavirus on its Windows and Surface businesses.

The business segment Microsoft calls "More Personal Computing" - which includes revenue from licensing Windows to PC manufacturers and its line of Surface hardware - is unlikely to hit the company's predicted $10.75 billion to $11.15 billion in revenue "due to uncertainty related to the public health situation in China," Microsoft said.

The forecasts for other parts of Microsoft's business are unchanged. Microsoft shares were down around 2 percent in after-hours trading immediately following the announcement to around $167 per share.

The updated guidance comes after Microsoft canceled events in Shanghai, Taipei and most recently Hong Kong related to its Ignite conference.

"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," Microsoft said Wednesday. "Our global health response team is acting to help protect our employees in accordance with global health authorities' guidance."

Meanwhile, Microsoft could be moving production of its Surface devices out of China due to the virus, according to a report from Nikkei Asian Review citing unnamed sources. Microsoft declined to comment to Business Insider on the report.

The update comes after Microsoft last quarter had what appears to be the best quarter for its Windows business at least since Satya Nadella became CEO in 2014 and started refocusing the company on the cloud. It was thanks to Microsoft ending support for Windows 7, its operating system used on millions of PCs since its launch in 2009, and encouraged users to upgrade to Windows 10 or buy new PCs that come preinstalled with it.

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