Apple Inc. on Wednesday cut its capital-spending projection for
this fiscal year by 8%, reducing what it plans to spend on
purchasing manufacturing equipment, building data centers and
retail stores.
Apple now expects to shell out $12 billion on capital
expenditures for the year ending in September, according to a
regulatory filing for the fiscal third quarter. In April, Apple had
projected $13 billion in capital spending—reiterating its forecast
from the beginning of the year.
A company spokeswoman said Apple lowered the forecast because it
was able to spend more efficiently for tooling equipment and
facilities. "There are no changes in our product plans," she
said.
Apple pays for specialized manufacturing equipment and then
leases the tools to its suppliers producing Apple products.
The revised projection comes a day after Apple reported its
profit rose 38% for the fiscal third quarter, though it fell short
of expectations for iPhone sales. Apple's shares dropped 4.2% to
$125.22 on Wednesday.
When Apple announced its initial spending plans in October,
Apple said it planned to allocate $12.4 billion for manufacturing
equipment, data centers, corporate facilities and infrastructure.
The remaining $600 million, Apple said, was earmarked for retail
store facilities including the opening of 25 stores and remodeling
of five existing stores.
Apple's capital spending can fluctuate based on the timing of
new products or the business conditions of partner companies. Apple
didn't break down its spending plans in its latest filing.
Last fiscal year, the company projected $11 billion in spending
for the year and met that estimate. The previous year, Apple spent
$7 billion in capital expenditure after projecting that it would
spend $10 billion.
The company has spent significantly more money in recent years,
building out a large footprint of data centers across the world to
power its services such as the App Store and iTunes. It is also
building a new corporate headquarters near its current offices in
Cupertino, Calif.
In retail, the company is expanding the number of stores it
operates in China. It plans to have 40 stores in China by the
middle of next year, compared with 22 stores currently.
Write to Daisuke Wakabayashi at Daisuke.Wakabayashi@wsj.com
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