Bernstein Liebhard, a self-proclaimed “nationally renowned investor rights law firm,” announced on Wednesday that it is investigating potential securities fraud violations on behalf of Apple shareholders, noting that the company’s recent earnings forecast cut contradicts statements made about the health of its Chinese business.
Bernstein Liebhard announced and publicized the potential class action in a website post shortly after Apple lowered its first-quarter 2019 earnings guidance.
Apple CEO Tim Cook stated in a letter to investors that the company expects to end the quarter with revenue of $84 billion, a decrease of more than 7 percent from the $89 billion to $93 billion forecast issued at the end of the fiscal year 2018. Cook attributed the reduction to the lackluster iPhone demand in Greater China and “other emerging markets.”
Bernstein Liebhard stated that Cook’s assessment of Apple’s Chinese business during a September investor conference call is at odds with the statement. Specifically, the law firm objects to Cook’s characterization of iPhone demand in China during the preceding quarter.
“Last quarter, our business in China was very robust. We are pleased with our 16 percent growth. Particularly impressive was the double-digit growth of iPhone sales “Cook stated in the past.
In its press release, the law firm asserts that Apple’s statement constitutes “materially misleading business information.”
It is unclear how Bernstein Liebhard intends to correlate two statements from two distinct periods, each about a different fiscal quarter.
In after-hours trading, Apple’s stock price dropped nearly $12, or over 7.5%, following Cook’s letter on Wednesday.
