Apple expects to miss quarterly revenue targets due to coronavirus impact

The company says the health crisis has slowed production and lowered demand for iPhones

Apple said on Monday that it expects to miss revenue targets for the quarter ending in March due to the coronavirus outbreak in China.

The company said that while factories in the country were reopening, the health crisis has slowed down its production and lowered demand for iPhones in the country.

Apple expects the production disruption to cause iPhone supply shortages in the coming weeks, with a knock-on effect on revenues.

"Work is starting to resume around the country, but we are experiencing a slower return to normal conditions than we had anticipated," Apple said in a press release.

The company did not provide any details regarding its new revenue outlook for the January-March quarter, and just said that the situation was "evolving". It had previously estimated $63bn to $67bn in revenue for the quarter.

"Apple is fundamentally strong, and this disruption to our business is only temporary," the firm added.

Last month, Apple reported its earnings for the quarter ending December 2019, beating profit estimates by Wall Street analysts. The iPhone maker posted earnings of $4.99 per share for the quarter, above estimates of $4.55 per share.

Sales in China, the world's third-largest retail market for Apple's iPhones (after the US and Europe), accounted for 15 per cent of Apple's total revenue in the previous quarter.

However, that dependency has now turned into a risk. Coronavirus has killed more than 1,800 people in the country, and tens of thousands remain infected by the deadly virus. Local authorities' quarantines and travel checks mean that a large number of workers are yet to return to their jobs following extended Lunar New Year holiday.

Foxconn, Apple's main iPhone supplier, said last week that the health disaster was delaying its return to full production. The company was also forced to call off its plan to resume production in its Shenzhen and Zhengzhou factories over continued coronavirus fears.

After conducting an on-site inspection of Foxconn's facilities in Shenzhen, public health experts told the company that the facilities faced "high risks" of virus infection and were not suitable to resume work.

Industry experts expect Foxconn to operate at only 50 per cent capacity by the end of February, and nearly 80 per cent capacity by the end of the next month.

Apple has reopened just five of its stores in China so far, with 35 more still closed. There is no information on when they'll reopen.