Apple: Holiday sales may miss target
Apple yesterday said sales for the crucial holiday quarter could miss Wall Street expectations, which chief executive Tim Cook blamed on weakness in emerging markets, foreign exchange costs and uncertainty whether the iPhone maker can keep up with demand for new products.
Apple said it expects between $89bn (€78bn) and $93bn in revenue for its fiscal first quarter ending in December, while Wall Street on average expects $93bn.
Shares dropped as much as 4.3% to $212.46 in after-hours trading after the results were released.
For the quarter ended in September, Apple brought in $62.9bn in revenue and $2.91 per share in profits, beating expectations of $61.5bn and $2.79, respectively.
In an interview with Reuters, Mr Cook said some of the forecast was explained by Apple releasing its top-end iPhone models, the XS and XS Max, in the fiscal fourth quarter.
Mr Cook also said foreign exchange rates would have a $2bn negative impact on Apple’s sales forecast.
Apple was unsure whether it can make enough new iPhones, Apple Watches, iPads and Mac models it released in recent weeks, Mr Cook told Reuters.
He said Apple is “seeing some macroeconomic weakness in some of the emerging markets,” without specifying which ones.
But Mr Cook stressed that Apple was happy with its performance in China, where revenue grew 16% to $11.4bn, the fifth quarter in a row the company has had double-digit growth in the region.
Apple’s cautious forecast could accelerate investor fears that have in turn erased stock market gains for much of the year. At market close yesterday, Apple shares were up more than 25% for the year — supported by purchases by Warren Buffett and a $100bn share buy-back programme — while the Nasdaq Composite Index is nearly flat for the year.
Apple sold 46.9m iPhones in the fiscal fourth quarter, missing analyst expectations of 47.5m iPhones, according to FactSet. But the average selling price of iPhones was $793, well above analyst estimates of $750.78, according to FactSet.
GM boosts profit despite China slowdown Apple said revenue from services, which includes iCloud, the App Store and Apple Music, reached $10bn, in line with analyst estimates.
Apple investors have been increasingly focused on growth in the company’s services business as growth in the global market for smartphones levels off in terms of unit sales.
Apple forecast a tax rate of 16.5% for the December quarter, above analyst expectations of 15.9%, according to data from Refinitiv.
“There’s going to be a minimum tax on foreign earnings coming from the new tax legislation” passed in the United States, Apple chief financial officer Luca Maestri said.
For its full fiscal 2018 ended in September, Apple reported revenue of $265.6 billion and profits of $11.91 per share, beating analyst estimates of $264bn and $11.79 per share.
Reuters
