After withdrawing its guidance for its fiscal Q2 2020, Apple is not providing traditional guidance to investors for fiscal Q3 2020. According to CFO Luca Maestri, there is simply too much uncertainty to provide any useful data for investors.
Apple traditionally provides investors with a variety of different guidance points, including revenue, gross margin, and operating expenses. In an interview with the Financial Times, Maestri explained Apple’s reasoning behind this decision for Q3 2020:
“We really didn’t feel there was enough visibility and certainty to provide guidance and frankly we didn’t want to do something that didn’t have much value for investors.”
Apple did, however, provide some very basic guidance for the quarter. The company is predicting that iPad and Mac revenue growth trends will improve during Q3 2020, while iPhone and wearables revenue performance will worsen in Q3 compared to the previous quarter.
Tim Cook attributed strong iPad and Mac performance to people working and learning from home.
A part of it is probably the consumer behavior of knowing this is going to go on for a little while longer and, getting some devices and so forth lined up to work at home more. In particular, as I think Lucas shared, we believe that iPad and Mac are going to improve on a year over year basis during this quarter
During Apple’s earnings call, Cook described Apple’s Q2 2020 in three phases:
- First 5 weeks: Confident it would be a record Q2
- Second 5 weeks: iPhone supply became constrained, demand in China dropped but stable elsewhere
- Last 3 weeks: As coronavirus spread globally, “downward pressure on demand” for iPhone and wearables
Towards the end of April, Maestri said that Apple saw an “uptick” attributable to the new iPhone SE, MacBook Air, and iPad Pro, alongside economic stimulus efforts in the United States and other countries.
“I think people are starting to get more adjusted to the new reality that Covid-19 is not going away any time soon and so they are trying to adjust their spending patterns as well,” Maestri added in the interview.
Catch up on our full coverage of Apple’s Q2 2020 earnings release here.