Investor Update on Quarterly Guidance
February 17 2020 - 4:00PM
Business Wire
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.
This update contains forward-looking statements, within the
meaning of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements include without limitation those
about the Company’s expected future financial results. These
statements involve risks and uncertainties, and actual results may
differ. Risks and uncertainties include without limitation: the
effect of global and regional economic conditions on the Company’s
business, including effects on purchasing decisions by consumers
and businesses; the ability of the Company to compete in markets
that are highly competitive and subject to rapid technological
change; the ability of the Company to manage frequent introductions
and transitions of products and services, including delivering to
the marketplace, and stimulating customer demand for, new products,
services and technological innovations on a timely basis; the
effect that shifts in the mix of products and services and in the
geographic, currency or channel mix, component cost increases,
increases in the cost of acquiring and delivering content for the
Company’s services, price competition, or the introduction of new
products or services, including new products or services with
higher cost structures, could have on the Company’s gross margin;
the dependency of the Company on the performance of distributors of
the Company’s products, including cellular network carriers and
other resellers; the risk of write-downs on the value of inventory
and other assets and purchase commitment cancellation risk; the
continued availability on acceptable terms, or at all, of certain
components, services and new technologies essential to the
Company’s business, including components and technologies that may
only be available from single or limited sources; the dependency of
the Company on manufacturing and logistics services provided by
third parties, many of which are located outside of the US and
which may affect the quality, quantity or cost of products
manufactured or services rendered to the Company; the effect of
product and services design and manufacturing defects on the
Company’s financial performance and reputation; the dependency of
the Company on third-party intellectual property and digital
content, which may not be available to the Company on commercially
reasonable terms or at all; the dependency of the Company on
support from third-party software developers to develop and
maintain software applications and services for the Company’s
products; the impact of unfavorable legal proceedings, such as a
potential finding that the Company has infringed on the
intellectual property rights of others; the impact of complex and
changing laws and regulations worldwide, which expose the Company
to potential liabilities, increased costs and other adverse effects
on the Company’s business; the ability of the Company to manage
risks associated with the Company’s retail stores; the ability of
the Company to manage risks associated with the Company’s
investments in new business strategies and acquisitions; the impact
on the Company’s business and reputation from information
technology system failures, network disruptions or losses or
unauthorized access to, or release of, confidential information;
the ability of the Company to comply with laws and regulations
regarding data protection; the continued service and availability
of key executives and employees; political events, international
trade disputes, war, terrorism, natural disasters, public health
issues, including the outbreak of COVID-19, and other business
interruptions that could disrupt supply or delivery of, or demand
for, the Company’s products; financial risks, including risks
relating to currency fluctuations, credit risks and fluctuations in
the market value of the Company’s investment portfolio; and changes
in tax rates and exposure to additional tax liabilities. More
information on these risks and other potential factors that could
affect the Company’s financial results is included in the Company’s
filings with the SEC, including in the “Risk Factors” and
“Management’s Discussion and Analysis of Financial Condition and
Results of Operations” sections of the Company’s most recently
filed periodic reports on Form 10-K and Form 10-Q and subsequent
filings. The Company assumes no obligation to further update its
guidance for the second quarter ending March 28, 2020, or any other
forward-looking statements or information, which speak as of their
respective dates.
Apple revolutionized personal technology with the introduction
of the Macintosh in 1984. Today, Apple leads the world in
innovation with iPhone, iPad, Mac, Apple Watch and Apple TV.
Apple’s four software platforms — iOS, macOS, watchOS and tvOS —
provide seamless experiences across all Apple devices and empower
people with breakthrough services including the App Store, Apple
Music, Apple Pay and iCloud. Apple’s more than 100,000 employees
are dedicated to making the best products on earth, and to leaving
the world better than we found it.
NOTE TO EDITORS: For additional information visit Apple Newsroom
(www.apple.com/newsroom), or call Apple’s Media Helpline at (408)
974-2042.
© 2020 Apple Inc. All rights reserved. Apple, the Apple logo and
iPhone are trademarks of Apple. Other company and product names may
be trademarks of their respective owners.
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version on businesswire.com: https://www.businesswire.com/news/home/20200217005467/en/
Apple Press Contact: Kristin Huguet Quayle, (408)
974-2414 khuguet@apple.com
Investor Relations Contact: Tejas Gala, (669) 227-2402
tgala@apple.com
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