Consumer electronics giant Apple (AAPL) posted better-than-expected results for the March quarter but warned that Covid-related shutdowns in China will negatively impact its June-quarter performance. Apple stock fell on the news Friday.The Cupertino, Calif.-based company late Thursday beat Wall Street’s targets for its fiscal second quarter ended March 26. However, Apple said lockdowns in China to prevent the spread of Covid-19 would cut its revenue in the current quarter. The impact includes factory and retail shutdowns in the country.”Supply constraints caused by Covid-related disruptions and industrywide silicon shortages are impacting our ability to meet customer demand for our products,” Chief Financial Officer Luca Maestri said on a conference call with analysts.
He added, “We expect these constraints to be in the range of $4 billion to $8 billion, which is substantially larger than what we experienced during the March quarter. The Covid-related disruptions are also having some impact on customer demand in China.”Apple Stock DropsOn the stock market today, Apple stock fell 3.7% to close at 157.65. It was a rough day overall for stocks.Morgan Stanley analyst Katy Huberty reiterated her overweight, or buy, rating on Apple stock after the earnings report. But she trimmed her price target to 195 from 210.”While management struck a more cautious tone given the uncertainty of Covid lockdowns in China and continued supply shortages, underlying demand commentary was more constructive,” she said in a note to clients.
“In a market beset by numerous challenges, Apple remains a beacon of stability, and we continue to see Apple as our top IT hardware pick for 2022.”Piper Sandler analyst Harsh Kumar kept his overweight rating on Apple stock with a price target of 195.”Even Apple is not immune to the geopolitical, Covid, and supply chain headwinds across the globe,” Kumar said in a note to clients. “However, Apple continues to deliver record performances across most products and services.”Apple’s March-quarter results got a lift from strong iPhone, services and Mac computer sales.
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