Apple pinched by pandemic; profit, iphone sales decline
BERKELEY » Apple’s profit dipped slightly while revenues rose in the Januarymarch quarter, reflecting early fallout from a coronavirus pandemic that shut down its factories and then forced hundreds of Apple retail stores to close.
The results released Thursday give the first sign of how one of the world’s best-known companies is faring as theu.s. economy plunges into its first recession in more than a decade.
Apple CEO Tim Cook said the current downturn could be harder on the company than what it experienced during the Great Recession of 2007-2009, when consumers were still captivated by the then-new iphone.
The current conditions represent “the most challenging global environment in which we’ve ever operated our business,” Cook said.
Apple’s revenue edged up by 1% from the same time last year to $58.3 billion during the company’s fiscal second quarter. To no one’s surprise, the iphone was the company’s hardest hit segment, with sales for the device falling 7% from the same time last year. Apple’s profits fell to $11.2 billion, a 2% decline from last year. The company told investors Thursday that iphone sales will deteriorate even further during the April-june quarter.
The numbers were far better than analysts, who were braced for a 6% revenue decline, had feared. “Investors were expecting a Friday the 13th like quarter,” Wedbush Securities analyst Daniel Ives said.
Those worries appeared well founded. That’s because Apple’s supply chain was already constrained by the pandemic’s early outbreak in China, which forced the company to temporarily close local factories that make most of its iphones and other products.
The factories n China are open and operating at normal levels again, but the closures created ripple effects that are expected to delay the fall release of Apple’s next iphone models by at least a month. Apple’s stores still remain closed in many parts of the world as part of efforts to limit the spread of COVID-19.