Apple has shared an investor update this afternoon focused on the guidance it provided for Q2 2020. Due to the ongoing coronavirus outbreak, Apple says it won’t hit the March revenue guidance numbers it provided.
Apple had forecast a wider-than-usual range revenue range for Q2, predicting revenue between $63.0 billion and $67.0 billion. Apple now says it won’t hit even the lower-end of that range due to the effects of the coronavirus in China:
Apple cites two main reasons for this: worldwide constraints for iPhone supply and demand for Apple products within China. First, Apple says that manufacturing facilities in China have reopened, but with slower than expected production rates:
It also says that Apple Stores in China are opening back up slowly, but with very low customer traffic:
Outside of China, Apple tells investors that customer demand across the product and services categories has been “strong to date and in line with our expectations.” The disruption to Apple’s business is “only temporary,” it says. “Apple is fundamentally strong.”
Apple also reiterates that its first priority is the health and safety of its employees, supply chain partners, and customers. The company is also “more than doubling” its previously announced donation to support coronavirus health efforts.
Read Apple’s full announcement here. The company says it will provide more information during its fiscal Q2 2020 earnings release and call in April.
This is the second time in the past year and a half that Apple has issued a rare earnings guidance revision. For Q1 2019, Apple was forced to lower revenue expectations due to fewer iPhone upgrades and lower-than-expected iPhone sales in China.
