The virus outbreak in China is hurting Microsoft more than expected, as the company said it won't meet targets that had already factored in the uncertainty.
In particular, Microsoft said revenue from Windows licenses and its Surface devices "are more negatively impacted than previously anticipated." The company said demand for Windows products is still strong, but getting the supply chain back to normal is taking longer. That goes for both Microsoft-made Surface devices and Windows products made by third parties, which include Acer and Lenovo.
Last month, Microsoft predicted it would make between $10.75 billion and $11.15 billion in revenue from its personal computing business in the January-March quarter. Microsoft's chief financial officer, Amy Hood, said on a Jan. 29 earnings call that the company had widened the usual range for its revenue forecast because of the "uncertainty related to the public health situation in China."
The company's statement Wednesday suggests that the range was not wide enough to reflect the spread of the outbreak and its ongoing effects.
About a third of Microsoft's revenue comes from Microsoft's personal computing division, which houses the company's Windows operating system, its line of Surface laptops and tablets, its Xbox gaming hardware and software and its Bing search service. Microsoft didn't say if its Xbox business has been affected by the supply chain problems.
Microsoft, which is based in Redmond, Washington, is among many tech companies relying on Chinese factories to make electronics devices and parts.
Last week, Apple warned investors that it won't meet its second-quarter financial guidance because the viral outbreak in China has cut production of iPhones. The Cupertino, California-based company said all of its iPhone manufacturing facilities in China have reopened, but production is ramping up slowly. The company said demand for iPhones was also down in China because Apple's retail stores are closed or operating with reduced hours.
Gilead Sciences to expand coronavirus drug trials
Drugmaker Gilead Sciences is expanding its clinical trials of antiviral drug remdesivir as a possible coronavirus treatment, the company announced Wednesday. Two new clinical trials of remdesivir are to begin in March, involving "approximately 1,000 patients at medical centers primarily across Asian countries, as well as other countries globally with high numbers of diagnosed cases," Gilead said. Remdesivir is already being tested in Wuhan, China, the center of the epidemic, and the U.S. National Institutes of Health announced Tuesday that the drug would also be studied in some of the patients who contracted the illness overseas.
Firm pays $53 million for pipeline violations
A utility company will pay the largest criminal fine ever imposed for breaking a federal pipeline safety law — $53 million — and plead guilty to causing a series of natural gas explosions in Massachusetts that killed one person and damaged dozens of homes, federal officials said Wednesday.
Columbia Gas of Massachusetts has agreed to plead guilty to violating the Pipeline Safety Act and pay the fine to resolve a federal investigation into the explosions that rocked three communities in the Merrimack Valley, north of Boston, in September 2018.
"Today's settlement is a sobering reminder that if you decide to put profits before public safety, you will pay the consequences," FBI Agent Joseph Bonavolonta said.
The company's parent, Merrillville, Indiana-based NiSource Inc., has also agreed to try to sell the company and cease any gas pipeline and distribution activities in Massachusetts, according to court documents.
Home Depot says too early to report on virus impact
Home Depot officials said they are confident the huge retail chain will feel little or no impact from the coronavirus until late spring.
During interviews Tuesday arranged to report results of the Atlanta-based company's fiscal year, executives declined to speculate about the extent of the disruption the virus will cause or when an impact would be felt.
"We are watching every part of this," said Richard McPhail, the company's chief financial officer. "I think it's just too early to speculate."
Home Depot is working with suppliers and believes all the materials it needs for the current quarter have either arrived or are on their way, he said. Roughly 70% of the materials that Home Depot buys are produced in the United States, he said.
The company, the largest based in Georgia, reported-fourth quarter revenues of $25.8 billion compared to $26.5 billion during the same three months a year earlier. Net earnings for the quarter were $2.5 billion, compared to net earnings of $2.3 billion, in the same quarter a year earlier.
Lowe's fourth quarter earnings are weaker than forecasts
Lowe's Cos. on Wednesday reported weaker- than-expected sales for its fiscal fourth quarter and offered an annual forecast that came below Wall Street expectations.
Lowe's CEO Marvin Ellison blamed the sales shortfall on the timing of its marketing campaign that didn't align with the compressed holiday season. It's e-commerce website is also under major renovation. But Lowe's said it's relaunching its website this spring and said it is working to update the stores with better signage and other merchandising changes.
Shares in the company closed down more than 4% Wednesday.
Ellison, a one-time Home Depot executive who took the top job at Lowe's in mid 2018, is trying to reshape the culture at Lowe's, which has been a distant second to Home Depot in the sector for a while. Ellison has been focusing on getting Lowe's back to the fundamentals of retailing, like making sure the right items are in stock and improving customer service.
New York may crack down on food delivery apps
The New York City Council will soon consider a package of bills believed to be the first local effort to regulate commissions, phone fees or some other aspect of the on-demand food delivery economy. The bills propose that food delivery apps be limited to charging restaurants no more than 10% commission and require them to be licensed through the city's Department of Consumer Affairs. Food delivery apps would also have to disclose to consumers the fees and commissions that they charge restaurants.