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“The Situation Is Evolving” – AAPL Cuts Guidance Due To Virus Disruptions

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Via Zerohedge

Surprise!

Apple has issued a press released, admitting it does “not expect to meet the revenue guidance we provided for the March quarter” due to coronavirus related issues.

In other words, the guidance we issued 19 days ago – blowing off any impact from the virus – is completely worthless.

Full Statement Below:

As the public health response to COVID-19 continues, our thoughts remain with the communities and individuals most deeply affected by the disease, and with those working around the clock to contain its spread and to treat the ill. Apple® is more than doubling our previously announced donation to support this historic public health effort.

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. Work is starting to resume around the country, but we are experiencing a slower return to normal conditions than we had anticipated. As a result, we do not expect to meet the revenue guidance we provided for the March quarter due to two main factors.

  • 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.

  • The second is that demand for our products within China has been affected. 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. We are gradually reopening our retail stores and will continue to do so as steadily and safely as we can. Our corporate offices and contact centers in China are open, and our online stores have remained open throughout.

Outside of China, customer demand across our product and service categories has been strong to date and in line with our expectations.

The situation is evolving, and we will provide more information during our next earnings call in April. Apple is fundamentally strong, and this disruption to 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 profound gratitude is with those on the front lines of confronting this public health emergency.

What is notable is the absence of a “but we’ll increase out share buyback program” rescue package for shareholders to rely on.

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Finally we note that the timing of this statement is anything but coincidence – on a market holiday in the US – as it gives the analyst community enough time to script their narrative for why this can all be discounted… or is more than priced in already… and/or will be erased thanks to an imminent v-shaped recovery or some such completely unknowable bullshit.

Of course this is all great news for the stock – consider what happened the last time AAPL cut guidance…

The stock price doubled!

With most markets still closed, we look to USDJPY for some idea of a reaction…

And it appears, Nasdaq Futs will open lower – but not dramatically so.

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