Apple Stock Slides On Report of 6 Million Hit to iPhone Shipments Amid China Covid Chaos
Updated at 10:32 am EST
Apple (AAPL) - Get Free Report shares extended declines Monday amid reports that the tech giant could see a 6 million shortfall in iPhone production from disruptions at its key China manufacturing plant.
Bloomberg reported Sunday that the turmoil could lop around 6 million Phone 14 Pro and Pro Max devices from production runs heading into the key holiday season.
The Zhengzhou-based complex, which saw violent protests last week as workers demonstrated against pay and working conditions in the 200,000-person plant run by Taiwan's Foxconn, continues to suffer from both a shortage of workers and strict conditions on movement and travel in around the city.
Last week, hundreds of workers were filmed in protest outside the Zhengzhou-based plant known as 'iPhone City', with some smashing windows and tearing down barricades, amid accusations of delayed bonus payments and dangerous working conditions linked to an earlier Covid outbreak.
Foxconn, the world's biggest iPhone assembler and operator of the Zhengzhou plant, denied the allegations, adding it's working with Chinese authorities to ensure security.
Apple shares were marked 1.95% lower in early Monday trading to change hands at $145.23 each, a move that would extend the stock's one-month slide to around 6.65%.
Earlier this month, Apple cautioned that Covid restrictions at the 200,000-person plant would curtail shipments of its higher-end iPhones heading into the holiday season in most of its global markets.
Foxconn itself said on November 10 that it will adjust its production capacity in China and elsewhere to ensure that Covid-linked shutdowns have a minimal impact, but noted that December quarter smartphone revenues would likely decline on year-on-year basis nonetheless.
Best Buy (BBY) - Get Free Report CEO Corie Barry, a key Apple retailer, said last Tuesday that supply chain disruptions has reduced the supply of "higher-end iconic iPhone devices"
Apple CEO Tim Cook said last month that iPhone demand has remained healthy, but noted that supply constraints for both the 14 Pro and the 14 Pro Max continued to persist heading into the key holiday season, even prior to the added restrictions at Zhengzhou.
iPhone revenues, in fact, were an important component of Apple's better-than-expected September quarter earnings, with sales rising 9.6% from last year to $42.62 billion.
Overall revenues, however, rose 2% from last year to an all-time high of $90.15 billion, helping Apple to a Street-beating fourth quarter earnings tally of $1.29 per share.
