Apple spooks market with profit warning

Apple spooks market with profit warning

Apple spooks market with profit warning

Suppliers for Apple took a stock market hit after the tech company warned investors it was lowering its first quarter revenue forecast, Financial Times reported.

Originally, Apple had forecast anywhere between $89 billion and $93 billion, while analysts opted for $91.5 billion.

Kevin Hassett, a top economic adviser to the president, acknowledged Thursday that the trade war is damaging United States businesses that have interests in China - and "a heck of a lot" of U.S. companies will have the same problem as Apple unless a deal is struck to lift tariffs.

The reckoning came in a letter from Apple CEO Tim Cook to the company's shareholders released after the stock market closed Wednesday.

Late previous year, investors became anxious that the trend was about to worsen when Apple said it would stop reporting how many iPhones it had sold.

Still, the market seemed to be caught off guard.

Along with macroeconomic challenges, he wrote, "we believe there are other factors broadly impacting our iPhone performance".

STMicroelectronics shares were down more than 9 percent. While we don't have the exact numbers, it's likely that many iPhone customers made a decision to pay the $30 to extend the life of their current handsets rather than shell out hundreds of dollars for a new model. The iPhone X launched in November 2017, while the iPhone XS and XS Max were released in September. Cook said that sales in other nations had also been disappointing.

Cook traced most of the revenue drop to China, where the economy has been slowing and Apple has faced tougher competition from home-team smartphone makers such as Huawei and Xiaomi. He further stated that "China is the biggest beneficiary of Apple, more than us".

To help boost iPhone sales, Mr Cook said Apple will expand its financing plans and build upon its recent efforts to make it easier to trade in older models at its stores.

Trump, addressing a press conference, yesterday in response to a reporter's question about Apple's "woes" said that "they were going to be fine" but he has to worry about the country.

With Apple's slumping stock taking a lot of the market down with it, the White House seemingly felt compelled to chime in on the matter. Mid-level officials from the Trump administration are scheduled to travel to Beijing for talks early next week.

He wrote: "most of our revenue shortfall and 100 per cent of our year-over-year worldwide revenue decline occurred in greater China across iPhone, Mac and iPad". In the U.S. government bond market, a typical safe-haven, the yield on the benchmark 10- year, which moves inversely to the bond's price, sank to an 11-month low.

Apple's warning, its first since 2002, deepened concerns about the Chinese economy, which had been showing signs of stress amid a trade war with the United States. Apple is appealing the decision.

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