Apple will not reach its fiscal quarter targets

Apple has published an important update on the guidelines for the fiscal quarter of March, announcing that the company will not achieve its objectives due to the impact of the COVID-19 coronavirus epidemic in China.

These are the words of Apple:

Our forecasts published on January 28, 2020 reflected the information available at the time and estimates of the pace of work after the end of the holidays for the Chinese New Year, already then postponed to February 10. Production is restarting across the country, but we are witnessing a slower return to normal than we expected. As a result, we do not expect to be able to meet the revenue estimates previously provided for the March quarter, due to two main factors.

Apple mentions both iPhone supplies, which will be limited worldwide, be it less demand of new Apple products in China. These two factors will have an important impact on Apple’s quarterly revenue.

As for the production of iPhones, Apple says that all its partner factories in China are located outside the epicenter in the province of Hubei and that many factories have already reopened.

As for the request from customers in ChinaApple says that the closure of physical stores and their reopening at limited hours has significantly reduced customer entry, although corporate offices and contact centers have reopened and online stores have never been closed.

Apple then says it is continuing to monitor the situation and that it will provide additional information on expected earnings in April. In addition, the company will double donations to help Chinese citizens fight the coronavirus.

Here are the words of Apple:

The first is that iPhone supplies worldwide will be limited temporarily. The factories of our partners for the production of iPhones are located outside the province of Hubei, and all the structures have been reopened, but the recovery of production is slower than expected. The health and well-being of the people who help us make our products are our top priority, and we are working in close collaboration with suppliers and public health experts to better manage the intensification of production. This shortage of iPhone supplies will temporarily affect revenue worldwide.

The second reason is that there has been an impact on the demand for our products in China. All of our stores in China, and many of the partner stores, have been closed. In addition, the open stores are operating part-time and with a very limited flow of customers. We are gradually reopening our stores, and will continue to do so at a steady pace and in the safest way possible. Our corporate offices and contact centers in China are open and our online stores have always remained operational.

On January 28, Apple expected revenue of $ 63-67 billion for the March quarter, but apparently the company will not be able to achieve this. Even then, Apple had maintained a wider gap precisely in anticipation of the impact and uncertainties arising from the coronavirus, but nobody expected the current consequences.

Tim Cook he also wrote a letter to employees:

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

Our primary concern is towards people in Apple’s community of employees, partners, customers and suppliers in China. I also want to thank the many people on our teams who worked 24/7 to manage the global response to COVID-19, with diligence and concern.

Corporate offices and contact centers have reopened across China and our stores are starting to reopen, but we are experiencing a delay in returning to normal conditions compared to forecasts. This afternoon, I shared an update with our community of shareholders and investors to let people know that we are not expecting to meet the revenue guidelines we had provided for the March quarter. Outside of China, customer demand for our product and service categories has been strong and in line with our expectations. Apple is basically strong, and this slowdown 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 in which we operate. Our deep gratitude goes to those who are at the forefront of tackling this global health emergency.

Tim

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