Apple Inc. (AAPL) - Get Report shares slumped to the lowest levels in near five months Monday after the tech giant was caught in the broader market maelstrom and warned that it will close its global retail outlets to help limit the spread of the coronavirus.
Apple said its 42 stores in Greater China, where infections have slowed precipitously, will remain open, but retail outlets elsewhere will remained shuttered until March 27. Apple said it would continue to pay hourly workers in the stores, while allowing employees across it worldwide operations to adopt flexible working practices, such as working from home, if possible.
Shares were further pressured by news that competition authorities in France fined the group $1.23 billion for what it call anti-competitive practices in the French market.
"The global spread of COVID-19 is affecting every one of us. At Apple, we are people first, and we do what we do with the belief that technology can change lives and the hope that it can be a valuable tool in a moment like this," Apple CEO Tim Cook said in a letter to employees.
"We are all adapting and responding in our own way, and Apple wants to continue to play a role in helping individuals and communities emerge stronger," he added.
Apple shares were last seen 10.15% lower in early trading to change hands at $249.96, after hitting $240.00 earlier in the session, the lowest since October 31 and a move that would mark a 25% decline from the all-time of 327.85 it reached on January 29.
Just over a month ago, Apple scrapped its second-quarter revenue guidance, citing the ongoing impact of the coronavirus outbreak in China, and noted that iPhone shortages would affect the tech giant's near-term sales.
Apple had said on January 29 that it expected revenue in the range of $63 billion to $67 billion. It was firmly ahead of the Wall Street consensus of $62.4 billion, but is also a much wider range than the company typically provides.
"Friday’s news marks an escalation in the impact of COVID-19 on both Apple and our coverage more broadly," said Credit Suisse analyst Matthew Cabral. "Starting with the near-term impact, we estimate two weeks of retail sales ex-Greater China equates to around $1 billion in lost revenue or around 2% of March quarter sales for Apple."
"While we recognize the potential for pent-up demand into 5G, we’d argue the significant extension in replacement rates in recent years suggests consumers may actually view iPhones as more of a discretionary purchase they’re willing to postpone, if needed," Cabral added.