Apple shares sink as Xmas sales forecast disappoints investors

4 min


0

Apple shares have plunged in after-hours trading after the iPhone maker’s forecasts for revenues in the the crucial Christmas period missed expectations.

The company’s boss Tim Cook said it expected a series of headwinds to weigh on growth in the coming months.

He said they included weakness in emerging markets, an expected $2bn cost from unfavourable foreign exchange rates and uncertainty over whether it could keep up with demand for new products.

Its fourth quarter results, covering the three months to October, showed Apple sold fewer iPhones than analysts had expected – almost 47 million – but revenues and profits all smashed forecasts.

Revenue was up 20% on a year ago at $62bn while profits rose 41%.

Its iPhone sales in the final three months, which tends to be the weakest period, were largely driven by the previous year’s models as the Xs range only went on sale at the end of September.

Apple unveiled the new iPhone 8, iPhone 8S and iPhone X at its launch event in California last year
Image:
Apple’s iPhone sales figures are largely based on the iPhone 8, iPhone 8S and iPhone X because the Xs range only went on sale a month ago

The new liquid retina display large screen XR was available from last week.

Apple has been placing a greater emphasis this year on growing services revenue – non-device sales – rather than relying on iPhones to drive profits.

:: Apple is ‘best private firm to work for in the UK’

That is largely because of strong competition in the smartphone sector, with owners of the most expensive devices more likely to hang on to them for longer.

Do you enjoy Down The Wing?

Services has become a more important metric for investors too as Apple seeks to become the first listed company to post quarterly revenues of $100bn.

Such an achievement would be most likely in the company’s first quarter – the current three months to the end of December.

It covers the first full months of sales for the new iphone range and the crucial holiday season, as it is described in the US.

The Apple Watch Series 4 being introduced at Apple's special event
Image:
The Apple Watch Series 4 was introduced in September

But shares were trading down 5% after-hours after it forecast $89bn-$92bn of revenue in the current October-December quarter though analysts questioned whether Apple was being deliberately cautious in its guidance.

The company is among the so-called FAANGs – Facebook, Apple, Amazon, Netflix and Google – whose stocks have faced intense pressure in recent weeks amid fears of US/China trade war pressure and that years of stellar earnings had peaked.

While values have staged a recovery of sorts in recent days, Apple’s share price remains largely unaffected and is 31% up on the year so far.

Analysts attribute that to the fact earnings growth has remained stable and it is facing fewer external pressures from governments and regulators.

Mr Cook told shareholders: “We’re thrilled to report another record-breaking quarter that caps a tremendous fiscal 2018, the year in which we shipped our 2 billionth iOS device, celebrated the 10th anniversary of the App Store and achieved the strongest revenue and earnings in Apple’s history.

“Over the past two months, we’ve delivered huge advancements for our customers through new versions of iPhone, Apple Watch, iPad and Mac as well as our four operating systems, and we enter the holiday season with our strongest lineup of products and services ever.”


Like it? Share with your friends!

0
DownTheWing

Legend

0 Comments

Your email address will not be published. Required fields are marked *

Choose A Format
Personality quiz
Series of questions that intends to reveal something about the personality
Trivia quiz
Series of questions with right and wrong answers that intends to check knowledge
Poll
Voting to make decisions or determine opinions
Story
Formatted Text with Embeds and Visuals
List
The Classic Internet Listicles
Countdown
The Classic Internet Countdowns
Open List
Submit your own item and vote up for the best submission
Ranked List
Upvote or downvote to decide the best list item
Meme
Upload your own images to make custom memes
Video
Youtube, Vimeo or Vine Embeds
Audio
Soundcloud or Mixcloud Embeds
Image
Photo or GIF
Gif
GIF format