- Apple Lowers Revenue Projection
Apple Inc., lowered revenue projection for the first time in two decades, citing weak growth in China and supply constraints to latest models of Apple Watch, iPad Pro and AirPods.
Tim Cook, Apple Chief Executive Officer, said on Wednesday that the company’s projection for the final quarter of 2018 is $84 billion, down from the $89 billion previously estimated and below the $88.3 billion reported for the first quarter.
Apple shares plunged 8.5 percent following the announcement as investors reportedly selloff their holding of the stock amid outlook uncertainty. The announcement was after weeks of speculation by analysts that Apple’s revenue will drop in 2019 due to suppliers’ data showing the company lowered orders for the new year.
“While we anticipated some challenges in key emerging markets, we did not foresee the magnitude of the economic deceleration, particularly in Greater China,” Cook wrote. “Sales in China and other emerging markets accounted for the majority of iPhone decline, but iPhone upgrades also weren’t as strong as the company anticipated in some developed markets,” Cook said.
Daniel Ives, an analyst at Wedbush Securities, said: “The fact that they missed that wasn’t the shock, it was the degree and how confined it was to China. The fact that China basically fell off a cliff was a jaw dropper, and combined with the lack of metrics, it makes investors feel like they’re walking blindfolded in the dark.”