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Apple CEO Tim Cook. (Apple Photo)

Apple CEO Tim Cook lowered guidance for his company’s first-quarter earnings on Wednesday, writing a letter to investors that cited China’s weakening economy and trade tensions with the U.S. as the primary driver of the shortfall. Apple shares were down 7.5 percent in after-hours trading.

“While we anticipated some challenges in key emerging markets, we did not foresee the magnitude of the economic deceleration, particularly in Greater China,” Cook wrote. “In fact, most of our revenue shortfall to our guidance, and over 100 percent of our year-over-year worldwide revenue decline, occurred in Greater China across iPhone, Mac and iPad.”

Cook said Apple expects to report the following for fiscal year 2019’s first quarter, which ended Dec. 29:

— Revenue of approximately $84 billion
— Gross margin of approximately 38 percent
— Operating expenses of approximately $8.7 billion
— Other income/(expense) of approximately $550 million
— Tax rate of approximately 16.5 percent before discrete items

Stock trading was temporarily halted Wednesday while Apple lowered its guidance. The company previously projected $89 billion-to-$93 billion in revenue.

Cook didn’t place all of the blame on China. He also said Apple is seeing fewer iPhone upgrades than expected, which partially accounted for the new guidance. Revenue outside of the iPhone business grew by nearly 19 percent year-over-year, according to Cook.

“Our non-iPhone businesses have less exposure to emerging markets,” he wrote.

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