Apple will not hit its quarterly revenue guidance due to the coronavirus outbreak which has hit supply chains and demand, it was announced on Tuesday.

The tech giant had previously forecast $63bn to $67bn in revenue for the quarter ending in March. No updated guidance was provided.

Apple said that its production facilities in China have re-opened, but they are slower than expected.

It added that the disruption would lead to iPhone supply shortages which would “temporarily affect revenues.”

Apple also said that the outbreak had adversely impacted demand in China, with its own stores and many of its partner stores closed.

The U.S. firm went on to say it was gradually reopening its retail stores and would continue to do so “as steadily and safely as we can.”

According to analysis from the FT: “Apple’s warning will send waves across Wall Street, which had already started to look past the continuing coronavirus crisis. Following its earnings report at the end of January, Apple’s shares have traded close to their all-time highs, valuing the company at more than $1.4tn as of Friday’s close.”

Indeed, on Tuesday morning it hit Asian and European markets. Tokyo’s Topix index dropped 1.3% on Tuesday, a seventh straight decline, while Seoul’s Kospi index and Hong Kong’s Hang Seng were both down 1.4%. Shares opened lower in Europe, with declines across all major indices and the composite Stoxx 600 index shed 0.8%

The news from Apple will underscore that China's economy is likely to be seriously hit by the coronavirus.

The head of the International Monetary Fund, Kristalina Georgieva, has said there could be a cut of about 0.1-0.2 percentage points to global growth.

 

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