Apple skips forecast for first time in a decade amid coronavirus uncertainty



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Apple reported quarterly revenue that grew 1pc, but did not provide a forecast for the first time in more than a decade, raising concerns that performance will be affected later this year.

Chief Executive Tim Cook said Apple experienced a “very depressed” period in late March and early April, deep in the Covid-19 pandemic, but that it saw a “recovery” in the second half of this month. .

The company increased its dividend and expanded a share buyback plan by $ 50 billion (€ 45 billion).

Second-quarter tax sales reached $ 58.3 billion, compared to $ 58 billion the prior year.

That beat Wall Street estimates, according to data compiled by Bloomberg.

IPhone revenue was $ 28.96 billion, down 7%, but it also exceeded analyst expectations. Service sales increased 17pc to $ 13.35 billion, while the accessories and personal accessories business rose 23pc to $ 6.28 billion. The shares rose 1.2 percent on Friday morning in New York.

“The last part of March and the first part of April were very depressed and then we have seen a recovery relative to that time period in the second half of April,” Cook said in an interview.

“I would attribute that in part to the new products we were able to launch in late March and early April, the economic stimulus and probably some level of people who are getting a little bit more used to that this is going to last a little bit.”

The Cupertino, California-based tech giant did not provide guidance for its June quarter due to continued complications from Covid-19.

“It just scares people about how bad the second quarter will be,” said Mike Walkley, analyst at Canaccord Genuity.

During a conference call, Chief Financial Officer Luca Maestri suggested that the challenges continue in the current quarter.

“On iPhone and portable devices, we expect year-over-year revenue performance to worsen in the June quarter compared to the March quarter,” he said. “On iPad and Mac, we expect revenue performance to improve year after year.”

Apple has been especially affected by the pandemic. In late January, many of its Asia-based suppliers and manufacturers were halted as part of efforts to stem the spread of Covid-19. This led to delays in the shipment of devices and supply limitations. Around that time, it closed all 42 retail stores in China, a key source of revenue for the company, and then closed its other retail locations. It is still waiting to reopen most of them.

In January, the company had projected second-quarter tax sales of between $ 63 billion and $ 67 billion, but withdrew the guidance in February when the pandemic began to spread outside of China.

On Thursday, Maestri said that digital content services such as Apple TV + and Music will remain strong, but that AppleCare’s warranty business and revenue from advertising deals will drop again. App store revenue grew double-digit in the second fiscal quarter, with paid subscriptions exceeding 550 million, he said.

“Our active base of installed devices reached a record high in all of our geographic segments and in all major product categories,” said the CFO. “We are confident in our future and continue to make significant investments in all areas of our business.”

Apple also sticks to its M&A strategy, Maestri said, while reiterating a promise to invest $ 350 billion in the US economy in the coming years.

Bloomberg

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