Apple shocked Wall Street with a rare revenue warning

Apple shocked Wall Street with an extremely rare revenue warning late yesterday, blaming economic weakness in China and disappointing iPhone upgrades in the developed world for a shortfall of as much as 10 per cent from its previous expectations. The news wiped more than 7 per cent from the company’s shares in after-market trading and stoked investor concerns over the outlook for the global economy… The scale of the disappointment was striking after Apple had appeared to rebut some recent suggestions of weakening demand for the iPhone. The company has been dogged in recent weeks by reports of falling orders among its suppliers and questions about the strength of demand for the new, lower-priced iPhone XR. Only two months ago Apple said it expected revenue of $89 billion – $93 billion for the final three months of 2018, the most important period of its fiscal year. That would have represented revenue growth of as much as 5 per cent from the same period the year before. Yesterday, however, it said that revenue for the period was likely to come in at approximately $84 billion, pointing to a decline of some 5 per cent instead.

Richard Waters