Apple unlikely to meet sales target due to coronavirus impact in China

The illness has killed 1,770 in China and stricken some 70,500 people.

Apple Inc warned on Monday it was unlikely to meet a sales target set just three weeks ago amid lost production and weakening demand in China from the coronavirus outbreak.

The illness has killed 1,770 in China and stricken some 70,500 people, with millions of others confined to their homes and factories slow to reopen after the Chinese New Year holiday break was extended due to the virus.

Manufacturing facilities in China that produce Apple's iPhone and other electronics have begun to reopen, but they are ramping up more slowly than expected, Apple said. That will mean fewer iPhones available for sale around the world, making Apple one of the largest Western firms to be hurt by the outbreak.

Some of its retail stores in the country remain closed or are operating at reduced hours, which will hurt sales this quarter. China accounted for 15% of Apple's revenue, or $13.6 billion, last quarter, and supplied 18% of revenue in the year-ago quarter.

In late January, Apple had forecast $63 billion to $67 billion in revenue for the quarter ending in March. It did not offer a new revenue estimate nor provide a profit forecast on Monday.

"The magnitude of this impact to miss its revenue guidance midway through February is clearly worse than feared," Wedbush analyst Daniel Ives wrote in a note.

Apple's stock is expected to face a knee-jerk reaction on Tuesday, when Wall Street reopens after the Presidents Day holiday, Ives said.

Analysts have estimated that the virus may slash demand for smartphones by half in the first quarter in China, the world's biggest market for the devices.

"The health and well-being of every person who helps make these products possible is our paramount priority," Apple Chief Executive Tim Cook said in a statement released by Apple. It will reopen China stores "as steadily and safely as we can," the company added.