Mike Wuerthele
Following the revision to Apple's earnings estimates on Wednesday, a second law firm has started investigating Apple's public claims about its disclosures surrounding business in China.
Just three days after Apple CEO Tim Cook published a revision to Apple's earnings estimate for the holiday quarter, New York's Bronstein, Gewirtz & Grossman has declared that it too is investigating if Apple has violated federal securities laws.
The lawfirm is questioning facts surrounding the announcement that Apple is expecting to end the quarter with $84 billion in revenue, a figure down more than 7 percent from an anticipated $89 billion to $93 billion forecast issued at the end of fiscal 2018. Cook blamed the cut on weak iPhone demand in Greater China and "other emerging markets" for the most part.
As with the previous investigation announced hours after the earnings revision, the firm is doubting Cook's statement from the previous quarter about business in China.
"Our business in China was very strong last quarter. We grew 16 percent, which we're very happy with," Cook said. "iPhone in particular was very strong, very strong double-digit growth there."
Beyond Apple, Intel, Ford, and other Fortune 500 companies have also expressed concerns about the Chinese economy in November and December 2018. Also like Apple, Intel and Ford noted positive results from China in the quarter ending in September 2018.
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16 Comments
Lawyers will be lawyers.
I’m confused. I’ve seen many companies, including ones I’ve worked for, revise their guidance when the actuals are trending too far from the estimates. This is all part of being transparent and operating in good faith. Nobody likes surprises, especially bad ones, so the best way to handle bad news is to put it out there early so those affected have as much time as possible to deal with it on their end. When did operating a business in an open and honest manner become a prosecutable offense?
Just keeps getting better. Now companies are expected to be ridiculously accurate reading their crystal ball into the future? Quite frankly I’m surprised he was accurate to within 7%.
The stock market is nothing but legalized gambling, and investors / lawyers are just looking for someone to blame / sue for the recent stock plunge.
More stupidity.
If there's one thing Tim Cook is famous for it's not giving away any information about what Apple is doing. Whether that be about future products or how the company is doing financially. He's notoriously vague.