Coronavirus: Apple won't hit revenue target for next fiscal quarter

Apple won’t hit revenue target for next fiscal quarter

Coronavirus: Apple won't hit revenue target for next fiscal quarter

Apple today issued a press release to update its investors about their situation in China (which faces an outbreak of the new Coronavirus, entitled COVID-19) and how it might affect company’s financial results for the next fiscal quarter.

Apple also said it is more than doubling the previously announced donation to help this historic public health effort.

In the statement, the company said the quarterly projection made on January 28, 2020 reflected the best information available at the time, as well as the most optimistic estimates of the pace of return to work after the end of the extended Chinese New Year holiday, in February, 10th.

Work in China is resuming, but this is happening more slowly than expected. Thus, the company informed that it will not meet the revenue target provided for the March quarter – due to two main factors.

The first would be the worldwide supply of iPhones, which will be temporarily restricted. While manufacturing partners are located outside of Hubei province – and even with those facilities already reopened – production is still resuming more slowly than anticipated. That is, the scarcity of iPhone supplies will temporarily affect revenues around the world.

The second is that demand for Apple products in China has been affected. All stores in the country and many partner stores were closed. In addition, open stores are operating at reduced hours and with very low customer traffic. Outside China, demand in all categories of products and services has been strong – so far – and in line with the company’s expectations. But, as we know, China has an extremely important weight for any global company today.

Still according to Apple, the situation is evolving and it will provide more information at its next financial event, which will take place in April.

Apple is fundamentally strong and this interruption in 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 where we operate. Our deep gratitude goes to those who are at the forefront of the confrontation with this public health emergency.

Apple’s projections for the second fiscal quarter of 2020 were as follows: revenue of $ 60-63 billion, gross margin between 38% and 39%, operating expenses between $ 9.6 and $ 9.7 billion, other revenue / ( expenses) of $ 250 million and a tax rate of approximately 16.5%.

Although the company said the numbers will be below that, it chose not to make any new projections.