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Apple posts record revenue but its value slips under $1tn

by Mark Tyson on 2 November 2018, 10:11

Tags: Apple (NASDAQ:AAPL)

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Apple released its Q4 financial results last night. The results were good, with Apple raking in record revenue - up 18 per cent quarter-on-quarter, and 20 per cent year-on-year. The total revenue amounted to $62.9bn with earnings per share of $2.94. However, weak guidance, or a disappointing outlook, impacted investor sentiment and in after hours trading Apple shares have fallen over 5 per cent (at the time of writing, and as low as 7 per cent a few hours earlier) bringing Apple's valuation back under the $1tn milestone.

"We concluded a record year with our best September quarter ever, growing double digits in every geographic segment. We set September quarter revenue records for iPhone and Wearables and all-time quarterly records for Services and Mac," said Luca Maestri, Apple’s CFO in a statement accompanying the results.

An overview of the performance of Apple in terms of revenue brought in geographically, and overall, is provided above. These look like good growth figures, especially in Japan. One must remember that the iPhone XS, released in September, won't show up in sales until next quarter. Its shift up in prices, with many iPhone models costing around $1,000+ seems to be paying off in some parts of the world. However I note that the guidance for the coming quarter flags demand slowdown in places like Turkey, India, Brazil and Russia.

The guidance for Q1 2019 has been officially bullet pointed as follows:

  • revenue between $89 billion and $93 billion
  • gross margin between 38 percent and 38.5 percent
  • operating expenses between $8.7 billion and $8.8 billion
  • other income/(expense) of $300 million
  • tax rate of approximately 16.5 percent before discrete items

Back to the Q4 2018 results, and Apple shared, as is usual, a breakdown of device and service sales units/revenue. It lists iPhone, iPad, Mac, Services, and Other products separately and investors like the transparency this provides.

As well as the 'weak' guidance for Q1 2019, investors heard the news that Apple would no longer be reporting unit sales as above. As the FT reports, CFO Luca Maestri "unexpectedly gave notice" that Apple would stop reporting unit sales for iPhones, iPads and Macs, starting from next quarter. The CFO tried to soft-soap the decision by telling analysts "a unit of sale is less relevant today than it was in the past" due to the wide range of models and price points and the reporting change is in the "best interest of investors".

Investors have never been able to check on the progress of some devices, like the Apple Watch, and some fear that any forthcoming slump in the key area of iPhone sales would be difficult to spot.



HEXUS Forums :: 8 Comments

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I guess pushing up prices has been a good short term strategy - but there is no ‘killer’ or significant game changer product on the horizon. Both the original ipod and iphone (and to some extent ipad) were innovative products in their day, building on a backbone of high performance PCs - but in reality innovation has been lacklustre for the last 5 years.

And that isn't just true about Apple either. Microsoft haven't been exactly innovative apart from a few gui tweaks - buts it is probably harder for Microsoft as traditionally they haven't been a major hardware provider - albeit that changed slightly with the surface range.

I can't really comment on the gaming sector as computer gaming leaves me cold - but apart from VR/AR which I don't believe has really taken off, most ‘gaming’ products seem to have some spurious claimed enhancement ‘for gamers’ to justify a 15 to 25 percent hike rise. And when innovation in motherboards seems to be based on who has the flashiest RGB - you can see how desperate manufacturers are becoming.

All IMHO of course :)
peterb
I guess pushing up prices has been a good short term strategy - but there is no ‘killer’ or significant game changer product on the horizon. Both the original ipod and iphone (and to some extent ipad) were innovative products in their day, building on a backbone of high performance PCs - but in reality innovation has been lacklustre for the last 5 years.

And that isn't just true about Apple either. Microsoft haven't been exactly innovative apart from a few gui tweaks - buts it is probably harder for Microsoft as traditionally they haven't been a major hardware provider - albeit that changed slightly with the surface range.

I can't really comment on the gaming sector as computer gaming leaves me cold - but apart from VR/AR which I don't believe has really taken off, most ‘gaming’ products seem to have some spurious claimed enhancement ‘for gamers’ to justify a 15 to 25 percent hike rise. And when innovation in motherboards seems to be based on who has the flashiest RGB - you can see how desperate manufacturers are becoming.

All IMHO of course :)

gaming industry is in a dark place at the moment imo. This could be summed up as (mostly) corporate greed.

- GPU manufacturer, Nvidia is all about profits; bringing incremental updates, charging ludicrous price for their products and treating customers like idiots with their empty marketing blurb that never materialise in real world.
- Most games these days are build around microtransactions and addictive practises (commonly used in gambling), everything else (story, fun factor) has little to no importance. So you get these nice looking but boring and retarded games that look like carbon copy. Ubisoft, 2k, EA are the main corporations that are killing the industry with their cut throat greedy approach; buying off small developers and killing their ideas with their own corporate greed.
- VR is in diapers. Software just isn't there yet. Hardware is still basic.

There are some good games out there; Total War Warhammer, Life is Strange 1, Pillars of Eternity, Hellblade, Dirt Rally, Ori and the blind forest. But the amount of $rap out there that tries to just to get your money and giving you just an empty shell is enormous.

Gaming peripherals, albeit expensive definitely evolved in the last few years. mechanical keyboards of all sort, gaming mouse, gsync monitors with high refresh rates. and RGB bling.
The fact that companies like Apple report these immense profits is a clear evidence that we (as a society / human beings) are in a dark place too….Instead of spending our money on something of true value we are fooled with ‘cleverly’ designed marketing tricks (that very often push our prime basic instincts), giving away our hard earned money to billionaires who are laughing all the way to the bank. I'm sure there is a connection between people getting fed up with status quo (and turning right wing) and doing idiotic things like spending over £1k on a phone - on contract / loan when they can't really afford it or could use this money to improve their quality of life.
peterb
I guess pushing up prices has been a good short term strategy - but there is no ‘killer’ or significant game changer product on the horizon. Both the original ipod and iphone (and to some extent ipad) were innovative products in their day, building on a backbone of high performance PCs - but in reality innovation has been lacklustre for the last 5 years.

And that isn't just true about Apple either. Microsoft haven't been exactly innovative apart from a few gui tweaks - buts it is probably harder for Microsoft as traditionally they haven't been a major hardware provider - albeit that changed slightly with the surface range.

I can't really comment on the gaming sector as computer gaming leaves me cold - but apart from VR/AR which I don't believe has really taken off, most ‘gaming’ products seem to have some spurious claimed enhancement ‘for gamers’ to justify a 15 to 25 percent hike rise. And when innovation in motherboards seems to be based on who has the flashiest RGB - you can see how desperate manufacturers are becoming.

All IMHO of course :)

It's a shame but Steve Jobs was willing to take risks. The problem is the current people in charge are good money men but seem to be still running off Jobs legacy. It was him pushing to do certain things which is why Apple has become so successful and there was a risk involved.

At least for me in the past Apple launches were genuinely more exciting - maybe it's time for some new blood at the company?
Buying opportunity….