Apple has updated its financial guidance for the March quarter and announced that it will be missing its revenue estimates for the time period due to the Coronavirus outbreak.
The company had announced its financial results for Q4 2019 on January 28 and provided its estimated revenue target for Q1 2020. The company had expected to generate revenue of $85.5 billion and $89.5 billion. However, the Coronavirus outbreak and the extended shutdown in China caused by the virus has affected Apple’s sales negatively and has prompted it to revise its earnings guidelines.
Apple says that while work has started resuming in China after the extended Chinese New Year holiday, things are taking a bit longer than anticipated. The virus outbreak has also led to the iPhone supply worldwide being constrained. None of the iPhone manufacturing plants are located in the Hubei province but work has been slow to ramp up after the holiday. The virus outbreak has also affected the demand for Apple products in China. The company and its partners have had to shut stores in the region and customer traffic is also very low.
The first is that worldwide iPhone supply will be temporarily constrained. While our iPhone manufacturing partner sites are located outside the Hubei province — and while all of these facilities have reopened — they are ramping up more slowly than we had anticipated. The health and well-being of every person who helps make these products possible is our paramount priority, and we are working in close consultation with our suppliers and public health experts as this ramp continues. These iPhone supply shortages will temporarily affect revenues worldwide.
Apple has not yet provided a revised earnings estimate for Q1 2020 due to the virus outbreak. This will likely depend on how quickly its supply-chain starts operating at full speed and how quickly things get back to normal in China.
Apple is not the only company that will miss its Q1 2020 earnings estimate. The shutdown in China due to the virus is going to negatively affect the revenues of all major companies in a big way. Like Apple, they are also facing a supply-chain disruption as well.[Via Apple]