Apple Made a Rare Cut to Its Sales Guidance After a Decade

Business

Already the tensions between U.S. and China are affecting the global market and companies in it. Now Apple is one of them. On Wednesday Apple cut its revenue forecast. Tim Cook, Apple’s CEO, wrote a letter to investors to financers of the company. According to the letter, Apple is revising its direction for its first quarter of fiscal 2019. Cook stated that the trade conflicts with the U.S. are increasing financial issues in China. Although, Apple shares slipped down by 7.5% in after-hours trading. The fall in shares resulted in a letter from the CEO to the financers.

Cook said it is clear that the company experienced a fall in economic growth during the second half. He believes that the growing trade disputes between the United States and China released additional stress on their economy. Stock trading was stopped for some time when Apple decreased its guidance. Shares of the company dropped after a halt on the stock was removed. Previously, the company estimated proceeds of $89 billion-to-$93 billion. Cook did not entirely blame China for the lower revenue. He also stated that Apple unrolled fewer iPhone upgrades than decided.

However, the fall in stocks took off $55 billion from Apple’s value. The values depended on Apple’s market cap at the end of Tuesday trading. Experts stated that the decision to revise guidance is a strange move. Apple previously reviewed its direction in 2002. Cook said the current revise covers the period until December 29. In September, Apple sent a letter to Robert Lighthizer, U.S. Trade Representative regarding the impact of tariffs. It included a statement saying duties imposed on China by Trump’s government could affect a number of Apple products. Apple also said that it is difficult to know how a tax that harms companies and consumers in the U.S. can be fruitful to the U.S. government. The letter suggested to reconsider the rules and find for another alternative that could make the U.S. economy stronger.

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