Apple shares close almost 10pc lower after China sales warning

Apple shares close almost 10pc lower after China sales warning

The new forecast from Apple expects revenue to be as low as $84 billion, blaming China but also the slowing number of iPhone upgrades in other countries.

Investors were shaken this week as Apple warned late Wednesday it would miss revenue expectations for its fiscal first-quarter. Apple's shares were briefly suspended on Wednesday night, and in post-market trading fell by up to 8pc, wiping nearly $60bn off its value.

In a report released this morning, financial analysts Canaccord Genuity believe that in spite of yesterday's report, the company is still fundamentally sound and they continue to recommend a BUY for Apple stock.

Also in some other markets, not so many users were switched to the indoor on the new iPhones as intended, acknowledged Apple.

Still, the market seemed to be caught off guard.

At least six Wall Street firms, including BTIG and RBC, lowered their share price forecasts by more than 15 percent after Cook's letter. Counterpoint reported iPhone sales dropped by 17% year-over-year during the third quarter due to the weak initial performance of the new models. The iPhone X launched in November 2017, while the iPhone XS and XS Max were released in September. The world's second largest economy, China is feeling the effects of a darkening trade outlook and government attempts to rein in risky lending after a rapid rise in debt levels.

Cook also said that Apple hurt its bottom line when it slashed the price of iPhone battery replacements early previous year after it was caught red-handed slowing down older iPhones to preserve their aging batteries.

Why it's important: While Apple has blamed support for Chinese brands and a slowing economy on its revenue drop, analysts pointed out that the company itself may be to blame.

Both Apple and Bernstein Liebhard have been contacted for comment.

"It's not going to be just Apple", CEA chairman Kevin Hassett said in an interview on CNN.

While President Trump's trade war with China isn't helping Apple and other U.S. technology companies, Ives believes Apple miscalculated by continuing to roll out high-priced phones in China, creating an opening for rivals with less costly alternatives that still worked well.

President Donald Trump said Friday he wasn't concerned about Apple's future and again encouraged CEO Tim Cook to move his supply chain to the United States.

"Lower than anticipated iPhone revenue, primarily in Greater China, accounts for all of our revenue shortfalls to our guidance and much more than our entire year-over-year revenue decline".

The yield on the 10-year Treasury fell to 2.64 per cent.

Shares fell 7% in aftermarket trading following the warning, which Chief Executive Tim Cook attributed largely to weak iPhone sales, largely in China, and currency fluctuations. Apple is appealing the decision.

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