Apple shares skid on worries over coronavirus impact

  • 3 months   ago
Apple shares skid on worries over coronavirus impact
Apple shares slumped on Wall Street Tuesday after the US tech giant warned of a bigger-than-anticipated financial hit from the coronavirus epidemic, roiling financial markets.
 
Shares in Apple tumbled some 2.5% in early New York trade, as global financial markets reacted to news of the economic impact of the health crisis.
 
 
Apple said Monday its revenue for the current quarter would be below its forecasts, and that worldwide iPhone supply "will be temporarily constrained" because of the global virus outbreak, notably in China, where Apple manufactures most of its devices.
 
Apple, which depends on components from Chinese suppliers and has a big market in China, has been hammered on both fronts.
 
"We are experiencing a slower return to normal conditions than we had anticipated," Apple said in a statement.
"As a result, we do not expect to meet the revenue guidance we provided for the March quarter."
 
Analysts said the news took financial markets by surprise.
 
"This unexpected news confirms the worst fears of the Street that the virus outbreak has dramatically impacted iPhone supply... with a demand ripple impact worldwide," said Daniel Ives of Wedbush Securities in a research note.
 
"While we have discussed a negative iPhone impact from the coronavirus over the past few weeks, the magnitude of this impact to miss its revenue guidance midway through February is clearly worse than feared."
 
The California group did not disclose how much it expected the outbreak to shave off its revenue.
 
Apple had forecast revenue of US$63 billion to $67 billion for the second quarter to March.
 
Ross Gerber of the investment firm Gerber Kawasaki said the Apple warning "is just the beginning" of the financial impact of the epidemic.
 
"We expect to see this from a huge amount of companies," Gerber said on Twitter. "Q1 number estimates are too high for most of the S&P big caps. So many are effected by China."
 

Source: Bangkok Post

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