Apple CEO Tim Cook on Wednesday warned investors that the company expects to fall as much as $9 billion short of its earlier revenue target for the first fiscal quarter of 2019.
In a rare guidance revision, Cook said Apple is now predicting revenue of $84 billion for the quarter that ended on December 29, after initially predicting between $89 billion and $93 billion. The Apple CEO pointed to a struggling market in China impacted by a trade standoff with the U.S. as the biggest factor for the change.
“While we anticipated some challenges in key emerging markets, we did not foresee the magnitude of the economic deceleration, particularly in Greater China,” Cook wrote in a letter to investors. “In fact, most of our revenue shortfall to our guidance, and over 100 percent of our year-over-year worldwide revenue decline, occurred in Greater China across iPhone, Mac and iPad.”
Cook added that "rising trade tensions with the United States" contributed to the downturn in China. He wrote that the iPhone sales fell short in both emerging markets like China and in more developed markets like the U.S.
Apple's announcement capped off a day of brutal economic news from abroad and challenges several top U.S. tech companies.
Dismal Asian manufacturing data released Wednesday showed the first contraction in Chinese industrial output in two years. And data from Europe released Wednesday also showed falling business spending.
Shares of Tesla and Netflix also took major hits Wednesday after both companies appeared to miss annual sales targets and projections.
The news also comes on the heels of a volatile fourth quarter for U.S. markets, leading some to worry about a potential downturn in 2019.
Sylvan Lane contributed.