While the markets were closed for Presidents’ Day, that’s not to say that there wasn’t anything notable that happened. As the coronavirus (now known as COVID-19) continues to spread in China, one of the largest companies in the world has warned investors that it might miss a few of its financial targets because of the outbreak. Apple (NASDAQ:AAPL) stated on Monday that it expects to miss its revenue guidance due to the coronavirus.
Back in January, Apple had expected sales for its second fiscal quarter to come in between $63 billion and $67 billion. While the company had figured that the outbreak would slightly hinder sales, now Apple is saying that the financial impact will be significantly bigger than initially expected. More specifically, while its Chinese iPhone manufacturing sites are outside of the Hubei province and back in production, it seems that output is ramping up at a slower pace than expected.
“Work is starting to resume around the country, but we are experiencing a slower return to normal conditions than we had anticipated. As a result, we do not expect to meet the revenue guidance we provided for the March quarter,” said Apple in a news release Monday. “The situation is evolving, and we will provide more information during our next earnings call in April. Apple is fundamentally strong, and this disruption to our business is only temporary.”
Apple also said that all of its stores in the country are closed, which understandably is impacting sales in the country as well. Outside of China, however, the company admitted that sales remain strong internationally and that this dip in expected quarterly revenue is entirely due to the impact on the Chinese market. The company didn’t provide an updated earnings target, instead promising to provide more details during its next conference call with analysts in April. Until then, shareholders will be left wondering just how severely of an earnings cut the company is going to announce.
At the time of writing, the number of COVID-19/coronavirus cases has swelled to 73,332, with 72,436 of these cases coming from mainland China. Only 15 cases of the virus have been documented in the U.S, with the global death toll reaching 1,873. Overall, however, it appears that the outbreak has been somewhat contained, with the growth rate of outbreaks seems to have slowed down drastically.
Apple Company Profile
Apple designs a wide variety of consumer electronic devices, including smartphones (iPhone), tablets (iPad), PCs (Mac), smartwatches (Apple Watch), and TV boxes (Apple TV), among others. The iPhone makes up the majority of Apple’s total revenue. In addition, Apple offers its customers a variety of services such as Apple Music, iCloud, Apple Care, Apple TV+, Apple Arcade, Apple Card, and Apple Pay, among others. Apple’s products run internally developed software and semiconductors, and the firm is well known for its integration of hardware, software and services. Apple’s products are distributed online as well as through company-owned stores and third-party retailers. The company generates about 40% of its revenue from the Americas, with the remainder earned internationally. – Warrior Trading News