Apple Says March Quarter Revenue Will Fall Short Due to Coronavirus Impact [Updated]

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Original poster
Apr 12, 2001
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Apple today issued an update on its financial guidance for the March quarter, announcing that the company will not meet its revenue goals due to the impact of the COVID-19 coronavirus epidemic in China.
Our quarterly guidance issued on January 28, 2020 reflected the best information available at the time as well as our best estimates about the pace of return to work following the end of the extended Chinese New Year holiday on February 10. 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 due to two main factors.
Apple cites both constrained iPhone supplies worldwide and lower customer demand for Apple products in China as the main impacts on performance for the quarter.

On the iPhone supply side, Apple says all of its manufacturing partner facilities are located outside of the Hubei province epicenter for the epidemic and have reopened, the ramp-up to full production has been slower than expected.

As for customer demand in China, Apple says store closings and limited hours have significantly reduced customer traffic, although corporate offices and contact centers have reopened and online stores have remained open.

Apple says it is continuing to monitor the situation and will provide additional information on its quarterly earnings call in April. Apple also says it is more than doubling its previously announced donation to help in the public health fight against the Wuhan coronavirus.

Apple had predicted in its earnings release at the end of January that it would see revenue of $63-$67 billion for the March quarter, a somewhat wider guidance range than usual as Apple acknowledged the coronavirus situation was leading to some uncertainty, but it appears the impact will be even larger than Apple had accounted for.

Update 5:59 p.m.: Bloomberg has shared Tim Cook's memo to Apple employees addressing the situation:
Team,

The response to COVID-19 has touched the lives of so many in the Apple family, and I want to thank everyone for their dedication, empathy, understanding, and care. Today, we more than doubled our donation to support the historic and global health response.

Our paramount concern is with the people who make up Apple's community of employees, partners, customers, and suppliers in China. I also want to recognize the many people across our teams who have been working around the clock to manage Apple's global COVID-19 response with diligence and thoughtfulness.

Corporate offices and contact centers have reopened across China, and our stores are starting to reopen, but we are experiencing a slower return to normal conditions than we had anticipated. This afternoon, I shared this update with our community of shareholders and investors to note that we do not expect to meet the revenue guidance we provided for the March quarter. Outside of China, customer demand across our product and service categories has been strong to date and in line with our expectations. Apple is fundamentally strong, and this disruption to our business is only temporary.

Our first priority - now and always - is the health and safety of our employees, supply chain partners, customers, and the communities in which we operate. Our profound gratitude is with those on the front lines of confronting this public health emergency.

Tim
Article Link: Apple Says March Quarter Revenue Will Fall Short Due to Coronavirus Impact [Updated]
 
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Freeangel1

macrumors regular
Jan 13, 2020
119
120
Apple needs to branch out and help the broken hospital system. We have great and fast enough iPhones, iPads and Macs . But when it comes to the hospitals THE SYSTEM IS BROKEN. there are so many diseases out there and NO CURE, not even for the common cold of the FLU which has already killed 10,000 people in the USA this year. More deaths than the coronavirus. Just shows how ILL equipped we are for a major Pandemic. I actually read that the scientists were predicting major VIRUS pandemics years ago and no one prepared still yet.
 

lewchenko

macrumors regular
Jun 8, 2004
182
152
Hopefully Apple will diversify more production out of China in future having learnt the lesson now. Saw this coming.

First SARS, now Covid-19. I’m sure there will be another until countries (not just China) change the way they treat their wildlife (or any animals for that matter)

Perhaps corporations like Apple should pressure the Chinese government for real change - after all the impact has been billions of $ and at least 1800 dead so far.
 

Queen6

macrumors 604
The global impact of 2019-nCoV will undoubtedly be widespread and impactful on multiple levels. Apple is simply reporting the facts as they see it to the shareholders. 2019-nCoV is without any doubts a serious issue and the virus must be contained. China is taking a very strong stance at tremendous financial cost to contain 2019-nCoV, realistically there is no other option.

The why's and the wherefores can be analysed at a later date, what's paramount right now is to stop the spread of the virus for obvious reasons....

Q-6
 

KPOM

macrumors G5
Oct 23, 2010
14,559
3,106
The first of many announcements from many companies, I suspect.
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What’s significant is that they didn’t give a revised figure. So they really don’t know how long their production will be constrained.
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Right because US-based manufacturing would NEVER be affected by anything whatsoever...
That said, this coronavirus might lead to some companies diversifying their supply chains.
 

Smartass

macrumors 65816
Dec 18, 2012
1,186
1,100
The magnitude of how much this virus has affected apple's quarter results, will take our breath away
 

tongxinshe

macrumors 6502a
Feb 24, 2008
821
372
So the rumors were true -- Apple originally planned to release iPhone 9 on Mar, but now had to postpone it to April. That's the only reason for Apple to know at such an early time, that it cannot meet the revenue guidance.
 

Baymowe335

macrumors 603
Oct 6, 2017
5,907
10,873
They also said everything outside of China is strong. Can't say I'm surprised. This has dragged on a little more than Apple anticipated.

The stock probably doesn't lose more than 2% tomorrow as this will be a one time event.
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How's that manufacturing in China working out for you now Tim Apple?
Been working like gangbusters. More profitable than any company in corporate history, for starters. See the last quarter? $22.1B in profit in 90 days. Best quarter ever.

Truthfully, Apple has a lot of manufacturing outside of China. The revenue impact is as much China being shutdown as the factories not producing the devices. You can still get an iPhone pretty easily.
 

falainber

macrumors 68000
Mar 16, 2016
1,887
2,470
Wild West
Apple needs to branch out and help the broken hospital system. We have great and fast enough iPhones, iPads and Macs . But when it comes to the hospitals THE SYSTEM IS BROKEN. there are so many diseases out there and NO CURE, not even for the common cold of the FLU which has already killed 10,000 people in the USA this year. More deaths than the coronavirus. Just shows how ILL equipped we are for a major Pandemic. I actually read that the scientists were predicting major VIRUS pandemics years ago and no one prepared still yet.
They also should stop the global warming.
 
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sw1tcher

macrumors 68000
Jan 6, 2004
1,642
2,003
They also should stop the global warming.
Maybe Apple will match the $10 billion Bezos has committed to the cause.

http://instagr.am/p/B8rWKFnnQ5c/
Today, I’m thrilled to announce I am launching the Bezos Earth Fund.⁣⁣⁣
⁣⁣⁣
Climate change is the biggest threat to our planet. I want to work alongside others both to amplify known ways and to explore new ways of fighting the devastating impact of climate change on this planet we all share. This global initiative will fund scientists, activists, NGOs — any effort that offers a real possibility to help preserve and protect the natural world. We can save Earth. It’s going to take collective action from big companies, small companies, nation states, global organizations, and individuals. ⁣⁣⁣
⁣⁣⁣
I’m committing $10 billion to start and will begin issuing grants this summer. Earth is the one thing we all have in common — let’s protect it, together.⁣⁣⁣
⁣⁣⁣
- Jeff
 

cmaier

macrumors P6
Jul 25, 2007
16,068
12,287
California
How's that manufacturing in China working out for you now Tim Apple?
Man, every time you see a “Tim Apple” you know it’s going to be a really profound insight.
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So the rumors were true -- Apple originally planned to release iPhone 9 on Mar, but now had to postpone it to April. That's the only reason for Apple to know at such an early time, that it cannot meet the revenue guidance.
That makes no sense whatsoever. It’s well into the quarter, and Apple knows what it’s sales have been and knows how many devices its factories can make. So it knows it can’t make enough to keep up with demand in the near term. Nothing at all suggests this has anything to do with “iphone 9.”
 
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