Earnings: Numbers Are Changing Apple

Learn all about the latest report, discover the truth behind the tech giant’s performance

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Learn all about the latest report, discover the truth behind the tech giant’s performance, and see what to expect in 2019 as Apple works harder than ever to appease both consumers and shareholders.

CHANGING LANDSCAPE

Last week, Apple’s chief executive Tim Cook penned a letter to investors, citing China as one of the key reasons for its 2018 sales problems. Cook said that Apple “did not foresee the magnitude of the economic deceleration” in China and that US-China trade tensions had hurt consumer confidence, causing fewer consumers to purchase new iPhone and iPad models. The note was unprecedented, and it was the first time Apple has revised its guidance to investors in more than 15 years, acknowledging weaker than expected sales.

The firm said that it expected revenue of around $84 billion for the first fiscal quarter, with a gross margin of approximately 38 percent. It added that operating expenses stood at around $8.7 billion and the number of shares used in computing diluted EPS to be approximately 4.77 billion. Following the unusual announcement, shares in the company fell by almost 10%, and Google’s parent company Alphabet overtook Apple to become the third biggest company, after Microsoft and Amazon.

Whilst the figures may, at first glance, appear doom and gloom for Apple, the truth is that the knee-jerk reaction was to be expected, and will no doubt settle in the coming weeks and months as investors begin to pour money back into the company. What’s more, Apple’s revised earnings are not the be all and end all of the company; the Cupertino firm still reported a record-breaking quarter, Apple shipped its two billionth iOS device