Feb 17, 2020 - Technology

Apple will miss quarterly earnings estimates due to coronavirus

Apple CEO Tim Cook

Apple issued a rare earnings warning on Monday, saying it would not meet quarterly revenue expectations due to the impact of the coronavirus, which will limit iPhone production and limit product demand in China.

Why it matters: Lots of companies rely on China for production, but unlike most U.S. tech companies, Apple also gets a significant chunk of its revenue from sales in China.

Details: The company said in a statement that it expects slower revenue due to a combination of slower iPhone production in China and lower demand for Apple products within China.

  • "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."
  • Apple had already given a wider range of guidance for the quarter, citing uncertainty over the virus' impact on both demand and production.

Apple stressed it sees the impact as temporary: "Outside of China, customer demand across our product and service categories has been strong to date and in line with our expectations."

Go deeper

Microsoft says PC unit will fall short of guidance due to coronavirus

Photo: Nicolas Economou/NurPhoto via Getty Images

Microsoft does not expect its PC unit, which includes Windows and Surface, to meet its previous quarterly revenue guidance due to the impact of the coronavirus on computer production, the company said in a Wednesday statement.

Our thought bubble, via Axios' Ina Fried: It's PC supply, not demand, that is below expectations, as the supply chain — much of which is in China — has been slower to return to full production.

Apple's coronavirus warning foreshadows broader threat for tech

Illustration: Aïda Amer/Axios

A warning from Apple on Monday that it would not meet its quarterly earnings forecast shows how quickly the coronavirus is creating real problems for the tech industry.

Why it matters: The virus is still in what could be the early stages and is already stressing supply chains and causing conference cancellations.

Go deeperArrowFeb 18, 2020 - Health

Microsoft and other tech firms sound alarm over coronavirus impact

Illustration: Aïda Amer/Axios

More companies are saying publicly that disruptions caused by the coronavirus are hitting their bottom lines. Microsoft warned Wednesday that its personal computing unit, which includes Windows and Surface, will likely miss revenue expectations due to a slower-than-expected return to production after the Lunar New Year.

The big picture: Although Apple was the first big tech company to warn of a financial impact from the outbreak, most industry watchers said they expected the impact to be felt broadly across the industry, which depends heavily on China for manufacturing.