Tim CookSource: Apple

What you need to know

  • One notable absence from Apple's Q2 earnings call was guidance for Q3.
  • Apple's CFO said that there was just too much uncertainty at play.
  • Apple did, however, note that it expects Mac and iPad to grow next quarter and iPhone and wearables to shrink.

Apple announced its Q2 earnings to the tune of $58.3 billion yesterday, however, it did not provide investors with any guidance regarding Q3.

Usually, at an earnings call, Apple would provide an estimated range regarding revenue for the upcoming quarter, based on how well (or not) it thought performance would go in Q3. As was rumored prior to the call, Apple did not provide any guidance for Q3 but noted a few trends it thought we could expect over the coming months.

Apple had previously withdrawn its guidance for Q2 in February stating:

Our quarterly guidance issued on January 28, 2020 reflected the best information available at the time as well as our best estimates about the pace of return to work following the end of the extended Chinese New Year holiday on February 10. Work is starting to resume around the country, but we are experiencing a slower return to normal conditions than we had anticipated. As a result, we do not expect to meet the revenue guidance we provided for the March quarter due to two main factors.

In the earnings call yesterday, Tim Cook said that Apple would not issue guidance for the coming quarter "given the lack of visibility and uncertainty in the near-term." He did note however that further ahead, Apple had a "high degree of confidence in the enduring strength of our business." He also noted that Apple's supply chain is "profoundly durable and resilient."

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Providing more details on the quarter and looking ahead, Apple CFO Luca Maestri said that Apple expects iPhone and wearables to worsen in performance in the June quarter year on year. Conversely, however, Apple expects Mac and iPad to improve during the same period.

Whilst this is perhaps an indication as to how Apple expects the next three months to play out, the overriding message was one of uncertainty. Apple did, however, announce that it plans to reopen its stores in Austria and Australia next week, a sign that Apple's retail operation might be headed that bit closer to normal service.

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