PALO ALTO, U.S. — Apple reported slight revenue growth in the past quarter despite disruption from the coronavirus pandemic. The iPhone-maker said its global supply chain, which depends heavily on Asia, remains resilient and production has started to return to normal.
“During a quarter when circumstances evolve by the hour, we have been gratified by the resilience and adaptability of our global supply chain,” Apple CEO Tim Cook said during a company earnings call on Thursday.
“While we felt some temporary supply constraints in February, our operations team, suppliers and manufacturing partners have been safely returning to work and production was back at typical levels toward the end of March,” he added.
But due to uncertainty around coronavirus Apple did not provide any guidance for the upcoming quarter ending in June or the fiscal year. “Given the lack of visibility and in certainly in the near term, we will not be issuing guidance for the coming quarter,” said Tim Cook.
For the three months ended March, Apple reported total revenues of $58.31 billion, up 0.5% from last year and beating the analysts’ consensus estimate of $54.78 billion. However sales in greater China, which includes Hong Kong and Taiwan, saw the biggest dip among all markets. Revenues slid 8% year over year as the region was first hit by coronavirus in January.
“The performance of our product business had three very different phases during the March quarter,” said Cook. “Based on Apple’s performance during the first five weeks of the quarter, we were confident that we were headed toward a record second quarter at the very high end of our expectations.”
However, as COVID-19 started impacting China more significantly in February, iPhone supply “was temporarily affected, as well as demand for our products within China,” which drove the company to withdraw its revenue guidance for the March quarter, said Cook.
The silver lining for Apple is that it has started to see signs of recovery in the region since last month. The company has reopened its 42 retail stores in China by mid-March.
“From a demand point of view, we saw an improvement in March over February [in China]. And if you look at where we are today, we’ve seen further improvement in April as compared to March,” said Cook.
As the virus spread globally and social distancing measures were put in place worldwide in the last three weeks in March, Apple said it saw more downward pressure on demand, particularly for iPhone and wearable products.
Sales of the iPhone, Apple’s main revenue driver, were down 7% year over year to $28.96 billion in the March quarter, while net profit for the period was $11.25 billion, down slightly from $11.56 billion last year.
Cook said that despite current uncertainty “over the long term though we have a high degree of confidence in the enduring strength of our business.”
“Our global supply chain is profoundly durable and resilient, we have shown the consistent ability to meet and manage temporary supply challenges like those caused by COVID-19,” he added.
Apple shares dipped more than 2.5% in after-hours on Thursday after a brief jump on the mixed results.