Apple is forecasting mid-year supply issues due to the COVID-19 lockdowns in China that had halted production in factories. Simultaneously, the Russian-Ukraine war has affected the sales of its products and slowed down its growth. Shares have plunged down by about 2 percent and outweighed its record sales and profit in the second quarter of this year.
CFO Luca Maestri said the company had to discontinue sales in Russia amid the war with Ukraine and a deep cut on sales would be reciprocated in the third quarter.
He added that the supply chain problems would further hurt the sales and it would be somewhere between $4 billion and $8 billion, amore downward graph than what was witnessed in the second quarter.
He further mentioned that the supply issues were mainly on the corridor of China due to the COVID restrictions as well as the chip shortages. The demand for Apple products has been affected by the newest variant of the coronavirus in the country.
Meanwhile, Apple chief Tim Cook has confirmed the Chinese factories have now resumed operations after the recent shutdowns due to the pandemic lockdowns and it is yet to understand when the market will overcome the chips shortage.
Navellier & Associates' chief investment officer said better guidance is needed to understand what is going on in China.
Amazon lately reported a disappointing outlook due to higher costs and raised concerns over the issues. Shares of the company dipped by about 9 percent. Similarly, Intel is forecasting a bleak quarter and its shares plunged by about 4 percent.
These companies are part of the Nasdaq Index and it has witnessed a fall of about 19 percent so far in 2022 due to an increase in inflation. Investors are trying to put their money elsewhere.
Apple has raised dividends by 5 percent and a buyback has been approved by its board for shares worth about $90 billion.