Published: Sun, November 04, 2018
Money | By Ralph Mccoy

Apple drops bomb on investors

Apple drops bomb on investors

"As demonstrated by our financial performance in recent years, the number of units sold in any 90-day period is not necessarily representative of the underlying strength of our business", CFO Luca Maestri said on Apple's quarterly conference call.

In an unprecedented move, Apple has made a decision to stop revealing the sales figure of iPhone from the first quarter of fiscal 2019.

The dip in Apple's shares to $208.50 knocked around $67 billion off its value, and put Amazon and Microsoft Corp (MSFT.O) back in the mix in the race among the United States' big tech players to be the world's most valuable company. But investors focused on the weak number of iPhones sold, not that the average selling price per phone had jumped to $793 from $618, and immediately sent Apple's share down about 3% in aftermarket trading.

Another metric analysts are watching closely: Apple's services revenue. The division includes the App Store, subscriptions, Apple Music, Apple Care and Apple Pay. This might be the reason behind Apple's decision of not sharing unit sales report. But consumers, investors and market analysts will nearly certainly disagree.

Apple forecast a tax rate of 16.5 percent for the December quarter, above analyst expectations of 15.9 percent, according to IBES data from Refinitiv. Cook was responding to a question on whether Apple is at a disadvantage in India, as compared to other markets, in terms of ability to own stores and manufacture its products.

Apple's revenue from services increased 17% YoY to US$9.98 billion.

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For that reason, he expects Apple's stock to fall slightly out of favor, at least until the new reporting structure is fully digested.

The company registered $62.9 billion in revenue, an increase of 20% over the same period a year ago, and quarterly earnings per diluted share of $2.91, up by 41%.

Keep in mind that these are units refurbished by Apple itself, which means you they're tested, certified, cleaned, given a new battery and outer shell, and come with a one-year warranty that you can extend with AppleCare+.

Apple aims for revenue between $89-$93 billion for its fiscal 2019 first quarter.

"Apple management are probably more concerned that a higher unit sale price might prompt accusations that the company is taken its customers for granted by continually ramping up prices", he said. Predictably, no one seemed to care that iPhone revenue jumped 29% year over year. At the low end of that range, Apple's holiday sales would be little improved from the record $88.3 billion it reported a year ago. The results were good, with Apple raking in record revenue - up 18 per cent quarter-on-quarter, and 20 per cent year-on-year. Apple decided to make a couple of big changes to the information it discloses every quarter.

However, the market was disappointed by word that Apple fell short of expectations with iPhone sales of 46.9 million iPhones and its forecast for the key holiday season was not as robust as anticipated.

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