Apple Warns Covid Restrictions In China Will Hit Holiday Quarter iPhone Shipments - TheStreet

Apple  (AAPL)  cautioned precocious Sunday that Covid restrictions astatine a cardinal manufacturing works successful China would curtail shipments of its higher-end iPhones heading into the vacation season.

Apple said the 200,000 idiosyncratic mill successful Zhengzhou, which is tally by iPhone assembler Foxconn, is "currently operating astatine importantly reduced capacity" owing to Covid restrictions enactment successful spot past week by officials successful Beijing.

"We proceed to spot beardown request for iPhone 14 Pro and iPhone 14 Pro Max models. However, we present expect little iPhone 14 Pro and iPhone 14 Pro Max shipments than we antecedently anticipated and customers volition acquisition longer hold times to person their caller products," the institution said successful a connection precocious Sunday. 

Apple shares closed astatine $138.38 each connected Friday, aft falling 0.19% connected the league to widen their six-month diminution to astir 9%.

Foxconn, a cardinal Apple assembler liable for astir 70% of the tech giant's iPhone shipments, said it is moving with officials successful the Chinese portion of Henan arsenic portion of a "concerted effort to stamp retired the pandemic and resume accumulation to its afloat capableness arsenic rapidly arsenic possible."

The radical besides said it would "revise down" its previously-issued forecast for December 4th sales, which it described arsenic 'cautiously optimistic', but noted that October revenues roseate astir 41% from past year, the largest summation connected record, up of its September 4th net merchandise connected November 10.

Apple CEO Tim Cook said past period that iPhone request has remained healthy, but noted that proviso constraints for some the 14 Pro and the 14 Pro Max continued to persist heading into the cardinal vacation season, adjacent anterior to the added restrictions at Zhengzhou.

iPhone revenues, successful fact, were an important constituent of Apple's better-than-expected September 4th earnings, with income rising 9.6% from past twelvemonth to $42.62 billion.

 Overall revenues, however, roseate 2% from past twelvemonth to an all-time precocious of $90.15 billion, helping Apple to a Street-beating 4th fourth net tally of $1.29 per share.

"We did amended than we anticipated, successful spite of the information that overseas speech was a important antagonistic for us," CFO Luca Maestri said, noting that December 4th income would endure a a 10 percent constituent year-on-year interaction from the surging U.S. dollar.

The world's biggest tech institution besides said vacation 4th revenues would dilatory from September levels, citing successful portion a 10 percent constituent year-on-year interaction from the surging U.S. dollar, which is trading adjacent 20-year highs against its planetary peers.