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Apple's Earnings Report Today to Reveal COVID-19's Impact on iPhone Sales

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Apple will report its financial results for the second quarter of its 2020 fiscal year at 1:30 p.m. Pacific Time today, providing a first look at how the company's sales have been affected by the global health crisis.

iphone-trade-in-store.jpg

On February 17, Apple announced that it no longer expected to meet its March quarter revenue guidance due to COVID-19's impact on the iPhone supply chain and demand for its products in China. The virus has since become a global pandemic, with all Apple Stores outside of China and Korea remaining closed.

Apple's letter to shareholders at the time:
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...
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Apple had forecasted revenue between $63 billion and $67 billion for the quarter, which ran December 29 through March 28. On average, analysts now expect that figure to be approximately $54.5 billion, down six percent from $58 billion in the year-ago quarter.

The second quarter encompassed the launch of new iPad Pro and MacBook Air models, which became available to order on March 18.

Apple CEO Tim Cook and Apple CFO Luca Maestri will review the financial results on a conference call at 2:00 p.m. Pacific Time, with a live stream on Apple's website. MacRumors will be providing detailed coverage of the remarks.

Article Link: Apple's Earnings Report Today to Reveal COVID-19's Impact on iPhone Sales
 
Article Link
https://www.macrumors.com/2020/04/30/aapl-2q20-earnings-preview/
I’m no analyst, but I’m guessing 15-20% down. I would imagine future quarters will be rocky as well.

Whatever the case, I’m not worried — Apple is a solid company and they seem to be responding well to the crisis. Their r&d budget sounds like it will remain robust, so this may push them ahead of competition in future years.
 
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Right now, it’s about the long term if you are invested Apple. If you are in it for the short term, expect your stomach to churn. The next quarters and coming year are gonna be rough. Even when we are in full recovery, the PTSD that comes out of this, people are gonna hang on to their money tighter due to fear of this happening again. Certainly those with existing devices will be keeping them a lot longer.

My plan all along was to start upgrading to newer Apple devices in 2023.
 
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Mr. Dee said:
Right now, it’s about the long term if you are invested Apple. If you are in it for the short term, expect your stomach to churn. The next quarters and coming year are gonna be rough. Even when we are in full recovery, the PTSD that comes out of this, people are gonna hang on to their money tighter due to fear of this happening again. Certainly those with existing devices will be keeping them a lot longer.

My plan all along was to start upgrading to newer Apple devices in 2023.
Click to expand...
So glad we have your expert advice on what the economy will look like in the coming months. I have an existing device and I plan on upgrading. An iPhone isn’t a want it’s a need for most people and you’ll see a large portion of people purchasing the 12 when it’s launched. Per orders will be sold out in hours.
 
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I think the real impact is yet to come. So far (I presume) most customers have been cautious yet relatively financially safe. That won't be the case if the pandemic measures carry on for weeks or months.
 
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H.E. Pennypacker said:
So glad we have your expert advice on what the economy will look like in the coming months. I have an existing device and I plan on upgrading. An iPhone isn’t a want it’s a need for most people and you’ll see a large portion of people purchasing the 12 when it’s launched. Per orders will be sold out in hours.
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So glad we have your expert advice since you know what everybody wants and needs.
 
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I had figured they would take a hit for this first quarter. Down the road things should recover provided they make some price adjustments to their smartphones.
 
Will we finally get uniform usb-c charging ports across the line or will Apple at least build wireless charging coils into iPads and MacBook that will piggyback and charge an iPhone or Apple Watch?

I am so sick of always having to pack usb-c and lightning cables.
 
H.E. Pennypacker said:
So glad we have your expert advice on what the economy will look like in the coming months. I have an existing device and I plan on upgrading. An iPhone isn’t a want it’s a need for most people and you’ll see a large portion of people purchasing the 12 when it’s launched. Per orders will be sold out in hours.
Click to expand...

There isn't a single economist that is confident about the global economy rebounding to late 2019 levels for at least a few years, and that period really won't start until the virus is controlled in 12-24 months, via herd immunity and/or a vaccine. For context, the crash of 2008 took at least 4-5 years to recover, and the world is anticipating this to be a far worse recession, meaning a longer recovery period.

I'm really glad that you will be okay and that you plan on upgrading. 10% of Americans have lost their jobs so far, and the freefall isn't going to end as soon as some nonessential businesses start being able to partially open up again. I can guarantee that folks still out of work come this fall will be worried about taking care of living necessities and not upgrading their functioning iPhone 6 to the iPhone 12, regardless of it's poor battery life or no longer receiving software updates.
 
The second quarter of the calendar year - next quarter - will be the one where companies are going to hurt on a revenue standpoint. Remember that most countries went on lockdown in March so CQ1 only reflects China’s full quarter lockdown. Taking into account the 10% growth that was planned, add the 6% assumed drop, that’s a 16% swing which totally reflects China (assumed 42% drop in rev. for 3 months) and one month of the rest of the world (14% drop).
Now think of CQ2 with the rest of the world in limbo! I don’t know if Apple will venture a forecast for this quarter, but CQ2 numbers released end of July will be pretty dismal.
Using a standard 12%-15% drop from CQ1 to CQ2 and adding the Coronavirus impact at 2 months for ROW (28% rev.) and none for China (optimistic!), the CQ2 numbers will be around $42B revenue, a 22% drop from same quarter a year ago ($54B)
Now, I don’t know many companies who sustained such a revenue (and margin $) drop without layoffs. I bet on at least 10% layoffs at Apple - notwithstanding what Tim Cook may be saying - which might be covered by getting rid of:
- open positions 1%
- contractors 3%
- voluntary leave 0.5%
- canceling a few projects (actual Corporate employee layoffs) 0.5% ~600
- part-timers (Retail) 5% ~6,000
I think Store Retail sales will suffer the most in the coming months, hence the staff reduction. Some of this part-time sales staff may be moved/trained to do tech support in store or at home so it may not be all 6,000 employees losing their job.
I hope I’m wrong!
 
Mr. Dee said:
Right now, it’s about the long term if you are invested Apple.
Click to expand...

War of words between US and China and decoupling can't be stopped at the moment. Every politician wants to take advantage of this argument. Many voters want to see this decoupling. It will weight heavy on the global economy.
 
Mr. Dee said:
Right now, it’s about the long term if you are invested Apple. If you are in it for the short term, expect your stomach to churn. The next quarters and coming year are gonna be rough. Even when we are in full recovery, the PTSD that comes out of this, people are gonna hang on to their money tighter due to fear of this happening again. Certainly those with existing devices will be keeping them a lot longer.

My plan all along was to start upgrading to newer Apple devices in 2023.
Click to expand...

I’d love to see our culture based on purchases closer to real need rather than rampant consumerism.
 
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Kierkegaarden said:
I’m no analyst, but I’m guessing 15-20% down. I would imagine future quarters will be rocky as well.

Whatever the case, I’m not worried — Apple is a solid company and they seem to be responding well to the crisis. Their r&d budget sounds like it will remain robust, so this may push them ahead of competition in future years.
Click to expand...
I wasn’t even close. Sorry to all who spent even a second reading my hot air.
 
Offering the 5.4” iPhone 12 at $649 and bumping the base capacity from 64GB to 128GB would be a great way for Apple to end 2020 on a high note.
 
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