Apple earnings warning a casualty of trade war

The Apple (APPL) share price dropped nearly 9% on the sharemarket after they issued earnings warning that they will earn much less than they have previously advised/expected. The drop in earnings is said to be primarily due to the US trade war with China. The share price has recovered a little on Friday US time, by midway through the day bouncing back 3.4%.

9to5mac: Apple’s shock earnings warning sees AAPL stock plunge 9% in pre-market trading

Apple’s shock earnings warning – the first time it has issued one since 2002 – has sent the stock price crashing in pre-market trading. At the time of writing, AAPL is almost 9% down on yesterday’s close.

It follows a letter from Tim Cook warning investors that Apple expects to miss the low end of its fiscal Q1 guidance by $5B, and the high end by $9B.

Cook said that almost all of the missing revenue was in China, thanks to a combination of low economic growth in the country and tensions created by the Trump administration’s trade war with China.

It wasn’t just AAPL stock hit by the news: Business Insider reports that shares in major Apple suppliers are also taking a hammering. AMS, which makes Face ID sensors for Apple, took the brunt of the impact, losing 17% of its market cap overnight – but it wasn’t the only casualty.

Apple’s last earnings warning was in 2002.

Like any wars there can be casualties on all sides in trade wars.