Apple Inc. AAPL on Monday said that it doesn't expect to meet the earnings guidance for the quarter ending in March, as both its supply chain and the demand for its products is impacted by the novel coronavirus (COVID-19) outbreak.
The consumer electronics giant makes iPhones and other products in China, where at least 1,868 people were confirmed dead from the virus by the end of Monday.
Apple previously outlined revenue quidance of $63 billion to $67 billion for this quarter but didn’t provide a number in the latest update.
The Cupertino-based company noted that while production has started since the extended Lunar New Year holiday, it’s not resuming as fast as the company initially expected.
“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,” Apple said in a statement.
The iPhone supply will be constrained worldwide, until the situation improves, affecting its revenues, according to Apple. The demand for its products in China has also dropped.
“All of our stores in China and many of our partner stores have been closed. Additionally, stores that are open have been operating at reduced hours and with very low customer traffic,” the statement read.
Apple will also “more than [double]” the amount of money donated for the efforts against the virus spread that CEO Tim Cook announced in January. The company didn’t specify the exact amount of the donation.
Why It Matters
A majority of the technology giants are experiencing losses because of the coronavirus outbreak.
After initially downplaying the impact of the virus, automaker Tesla Inc. TSLA acknowledged the uncertainty in its latest filing with the Securities and Exchange Commission.
Hon Hai Precision Co. Ltd. HNHPF, aka Foxconn, which manufactures iPhones for Apple in China, has reportedly turned to making masks in its factories as it seeks to meet regulatory standards for resuming production, even as paranoia among the employees remains high.
Apple's stock last closed slightly higher at $324.95 on Friday. The stock market was closed on Monday for Washington's Birthday.
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