Apple issues rare earnings guidance revision, lowers forecast by $9 billion

Apple issues rare earnings guidance revision, lowers forecast by $9 billion

Apple issues rare earnings guidance revision, lowers forecast by $9 billion

And it may bode poorly for the rest of the year.

Cook said Apple's revenue for the October-December quarter - including the crucial holiday shopping season - will fall well below the company's earlier projections and those of analysts, whose estimates sway the stock market.

Apple blamed China's slowing economy, which has been compounded by the impact of a growing trade war with the U.S. President Donald Trump, who has targeted China's trade policies as "unfair", has levied hundreds of billions of tariffs on Chinese imports. Its gross margin is now expected to be 38 percent, a tick below the 38 percent to 38.5 percent range it previously forecast, suggesting a mix shift to lower priced, less profitable products.

Now, $US84 ($120) billion sounds like a lot of money, especially considering the fact that Apple expects its quarterly operating costs to come in at around $US8.7 ($12) billion. After Apple took such drastic measures as to put new iPhone models on sale leading up to the holidays, it was clear that the company was staring down the dark throat of decline.

That is down from its November forecast of at least $89bn - a prediction that had already disappointed investors. As a market where Apple expected to drastically expand within, a weak period stifled any hopes of major growth. The company saw a decline in sales of iPhones, Macs and iPads in the country. This has been a lesson in setting expectations at the appropriate levels, but also a time of learning for Apple that limits on smartphone pricing have been reached for the masses.

"The trade tensions between the United States and China put additional pressure on their economy", Cook said, noting also that he has not noticed if the Chinese government has targeted the US cell phone provider.

He said that due to "consumers adapting to a world with fewer carrier subsidies, U.S. dollar strength-related price increases, and some customers taking advantage of significantly reduced pricing for iPhone battery replacements". He then goes on to blame several factors that are beyond Apple's control and repeatedly insists that its new products are actually succeeding so well that they've often been in short supply.

New Pentagon chief Shanahan sees China as top priority
Trump told Shanahan he was "such a pleasure" to work with and that he had "done a really fantastic job" with regard to the border. In the letter, Mattis said he would step down February 28, but Trump later accelerated that to the end of the year.

The Dow closed 18.78 points higher to end the first trading session of 2019, clawing back almost 400 points in losses that it shed earlier in the day amid weak economic data from China and renewed concerns about the ongoing trade war between the world's two largest economies.

But the iPhone XR sits in an awkward position.

Qualcomm, the plaintiff, said last month that the Fuzhou Intermediate People's Court ordered four Apple subsidiaries to stop selling older models of the iPhone in China, including the 7, 7 Plus, 8 and 8 Plus.

The Dow Jones Industrial Average and other major United States stock indices closed in the green on Wednesday following another day of the sort of volatile trading that Allianz Chief Economic Advisor Mohamed El-Erian predicted will be the "new reality" for the stock market.

Update, 2:14 p.m.: To include further details, stock market price and background.

The story originally published at 1:42 p.m. PT.

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