Apple skips forecast for the first time in a decade amid virus uncertainty

APPLE reported quarterly revenue that grew 1pc, but didn’t provide a forecast for the first time in more than a decade, sparking concern that performance will suffer later this year.

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

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

Fiscal second-quarter sales came in at $58.3bn, compared with $58bn a year earlier.

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

IPhone revenue was $28.96bn, down 7pc, but also topping analysts’ expectations. Services sales jumped 17pc to $13.35bn, while the wearables and accessories business climbed 23pc to $6.28bn. The shares rose 1.2pc on Friday morning in New York.

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

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

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

“It just spooks people about just how bad the second quarter is going to be,” said Mike Walkley, an analyst at Canaccord Genuity.

During a conference call, chief financial officer Luca Maestri suggested that challenges continue in the current quarter.

“On iPhone and wearables, we expect the yearover-year revenue performance to worsen in the June quarter relative to the March quarter,” he said. “On iPad and Mac, we expect the year-overyear revenue performance to improve.”

Apple has been uniquely affected by the pandemic. In late January, many of its Asia-based suppliers and manufacturers ground to a halt as part of efforts to curb the spread of Covid-19. That resulted in shipping delays for devices and supply constraints. Around that time, it closed all 42 retail stores in China, a key source of revenue for the company, then shut its other retail locations. It’s still waiting to reopen most of them.

In January, the company had projected fiscal second-quarter sales of between $63bn and $67bn, but it pulled the guidance in February as the pandemic starting spreading outside of China.

On Thursday, Maestri said digital content services, such as Apple TV+ and Music, will remain strong, but that the AppleCare warranty business and revenue from advertising deals would again dip. App Store revenue grew double digits in the fiscal second quarter, with paid subscriptions topping 550 million, he noted.

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

Apple is also sticking to its M&A strategy, Maestri said, while reiterating a pledge to invest $350bn in the US economy in the coming years.