Apple warns on revenue guidance due to production delays, weak demand in China because of coronavirus

Apple said Monday that it does not expect to meet its quarterly revenue forecast because of lower iPhone supply globally and lower Chinese demand as a result of the coronavirus outbreak.

The company initially said that it expected to report net sales between $63 billion to $67 billion in its fiscal second quarter. Apple did not provide a new forecast for its fiscal second-quarter revenue on Monday.

The company said it provided a wider range than usual in late January, citing the uncertainty around the coronavirus outbreak.

“As you can see from the range, anticipates some level of issue there. Otherwise, we would not have a $4 billion range,” CEO Tim Cook said at the time.

Apple makes most iPhones and other products in China. The Coronavirus has caused it to temporarily halt production and close retail stores in China. Some Apple retail stores reopened in China with reduced schedules last week.

The company said Monday it is “experiencing a slower return to normal conditions than we had anticipated” after the extended Lunar New Year holiday. All iPhone manufacturing facilities in China have reopened, but Apple said it still expects supply shortages of the phone globally.

This is the second time in the last 13 months that Apple has had to cut its guidance due to concerns in China. In January 2019, Apple was forced to slash revenue guidance for its fiscal first quarter of 2019 due to weak iPhone sales in China.

Apple is widely expected to announce a new, cheaper iPhone model this spring. It’s unclear if the delays in China will affect that launch.

[“source=cnbc”]