Apple reported sales and profit rise for the holiday shopping quarter above Wall Street expectations, thanks to rising iPhone sales for the first time in a year and soaring demand for add-ons like AirPods wireless headphones. However, Apple is facing more disruptions in virus-hit China.

The performance outweighed concerns about the coronavirus outbreak in China, a major market and manufacturing hub for Apple, and a slight revenue miss in the company’s services business, which includes the new Apple TV Plus streaming offering.

Shares of Apple rose 2 per cent. Apple forecasted revenue for the quarter ending in March above Wall Street expectations.

Chief Executive Tim Cook told Reuters the company used a wider-than-normal prediction range because of the uncertainty created by the coronavirus.

“We have limited travel to business-critical situations as of last week,” he said. “The situation is emerging, and we’re still gathering lots of data points and monitoring it very closely.”

Apple has suppliers in the Wuhan area, the heart of the outbreak, but has alternatives, Cook said. Factories outside Wuhan area will not reopen after the Lunar New Year holiday until Feb.10, Cook said, but Apple built the delayed restart into its wider revenue forecast.

Apple has shut one store in China, he said, and reduced hours at others because of lower foot traffic, Cook said. Third-party stores that sell Apple products are also facing some closures, Cook said.

Apple is “forecasting a stronger Q2 than analysts predicted, but the fact that the coronavirus is spreading in unpredictable ways in China, where Apple has most of its hardware built, could upset this optimistic forecast,” said eMarketer principal analyst Yoram Wurmser.

Reuters