“Apple’s almost universally positive financial outlook, offered in investor conference calls following quarterly earnings reports, are again under scrutiny as a class action complaint takes issue with comments made by CEO Tim Cook and CFO Luca Maestri in the quarter leading up to a revenue guidance correction in January,” Mikey Campbell reports for AppleInsider. “The complaint, lodged with the U.S. District Court for the Northern District of California, homes in on forward-looking statements regarding Apple’s business in China — specifically iPhone — for the important holiday quarter of 2018In forecasts presented during a conference call last November, both Cook and Maestri touted a strong product lineup expected to fuel first fiscal quarter sales between $89 billion and $93 billion.”
“Beyond reiterating prepared guidance, Cook and Maestri emphasized a positive outlook in fielding questions from analysts. Specifically, Cook dismissed concerns of “macroeconomic uncertainty” in emerging markets like China, citing Apple’s “very strong” performance leading into the holiday season. The executives also failed to recognize the brewing U.S.-China trade war,” Campbell reports. “That take was ultimately proven incorrect, as economic headwinds in the burgeoning Chinese market contributed to what would result in quarterly revenue of $84.3 billion, well below initial guidance.”
“The suit also claims Apple failed to account for knock-on effects of its iPhone battery replacement program, instituted in 2017 to allay concerns of handset throttling,” Campbell reports. “It was later learned that Apple replaced some 11 million iPhone batteries, up to 11 times more than anticipated, allowing users to hold on to their smartphone instead of buying a new model.”
Much more, including the text of the class action complaint, in the full article here.
MacDailyNews Take: Again, both Apple CEO Tim Cook and CFO Luca Maestri could have thought, back in November, that China iPhone sales would continue and they might not have been able to foresee, even though it seems painfully obvious in hindsight, that a late rush of battery replacements would ensue in December just before the low-priced iPhone battery replacement program’s end date, negatively impacting sales of new iPhones.
Class action lawsuit filed against Apple for making false and misleading statements to the market – May 6, 2019
Levi & Korsinsky, LLP announces class action lawsuit against Apple over false and misleading statements – April 19, 2019
The Law Offices of Vincent Wong files class action lawsuit against Apple, alleging executives made false and misleading statements to the market – April 19, 2019
Bronstein, Gewirtz & Grossman announces deadline for class action lawsuit against Apple over false and misleading statements – April 19, 2019
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