Skip to Content
Stock Analyst Update

Coronavirus Stifles Apple Revenue Guidance for Quarter

We still think it is likely any near-term shortfall will be made up in subsequent quarters.


On Feb. 17, Apple (AAPL) issued a press release that stated it no longer expects to meet its revenue guidance provided on Jan. 28 as the coronavirus (COVID-19) continues to threaten iPhone supply and demand. The firm’s two primary reasons for the expected sales shortfall included worldwide iPhone supply being temporarily constrained and lower demand in China. Although the firm’s contract manufacturing sites outside of the Hubei province (currently in full lockdown) have reopened, they are taking longer to ramp than Apple had anticipated. Meanwhile, Apple stores in China have been closed and partner stores that have been open had reduced operating hours with minimal foot traffic. Positively, customer demand for Apple’s products outside of China has been consistent with the firm’s prior expectations.

For the March quarter, Apple had previously expected sales in the range of $63 billion-$67 billion. We note that revenue from Greater China has averaged $11.4 billion over the past eight quarters. All in, we think revenue could be anywhere from $56 billion to $60 billion in the quarter, but the situation remains fluid, as evidenced by Apple’s own reticence in providing a revised guidance range. However, we still think it is likely any near-term shortfall will be made up in subsequent quarters (particularly with a 5G iPhone 12 set to launch in September). Consequently, we are maintaining our $240 fair value estimate for narrow-moat Apple. We continue to see shares as overvalued, as we believe the implied growth for the iPhone and services segments are too high.

Morningstar Premium Members gain exclusive access to our full analyst reports, including fair value estimates, bull and bear breakdowns, and risk analyses. Not a Premium Member? Get this and other reports immediately when you try Morningstar Premium free for 14 days.

Abhinav Davuluri does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.

We’d like to share more about how we work and what drives our day-to-day business.

We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.

How we use your information depends on the product and service that you use and your relationship with us. We may use it to:

  • Verify your identity, personalize the content you receive, or create and administer your account.
  • Provide specific products and services to you, such as portfolio management or data aggregation.
  • Develop and improve features of our offerings.
  • Gear advertisements and other marketing efforts towards your interests.

To learn more about how we handle and protect your data, visit our privacy center.

Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.

To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.

Read our editorial policy to learn more about our process.