Apple to Announce Q1 2019 Earnings on January 29, iPhone Unit Sales Won't Be Included

[MacRumors]

Apple today updated its investor relations page to announce that it will share its earnings for the first fiscal quarter (fourth calendar quarter) of 2019 on Tuesday, January 29.

Along with the notice on when to expect earnings results, Apple today also announced revised guidance for the first fiscal quarter, which will make the January earnings call an interesting one.

Apple now expects revenue of $84 billion and gross margin of 38 percent, down from a guidance of $89 to $93 billion provided in November during the fourth quarter earnings call.

Apple CEO Tim Cook provided several reasons for the drop in an open letter to investors:

[*]iPhone XS, XS Max, and XR launch timing compared to iPhone X timing in 2017
[*]A strong U.S. dollar
[*]Supply constraints on Apple Watch Series 4, iPad Pro, AirPods, and MacBook Air
[*]Economic weakness in emerging markets, specifically China
[*]Trade tensions with China
[*]Lower than anticipated iPhone revenue, primarily in China
[*]Weak iPhone upgrade numbers in some developed markets due to fewer carrier subsidies and low-priced battery replacements in 2018

The earnings call will provide more detailed information on Apple's revised guidance, though the January 29 earnings report will be the first without specific unit sales data for iPhone, iPad, and Mac, which Apple said it would stop providing back in November.

It marks a major change in the way that Apple's sales data is reported, making estimating iPhone, Mac, and iPad product sales more difficult. At the time the change was announced, Apple CFO Luca Maestri said that the company does not believe unit sales over the course of a 90-day period are an indicator of the underlying strength of its business.

Apple CEO Tim Cook today provided CNBC with a little more info on its decision, pointing out that the company never offered Apple Watch sales data because of the price range and the lack of value in sharing sales numbers. The iPhone, Cook says, is now in the same position.

It's sort of like you and I going to the grocery store and putting things in our cart and coming up to the register and the person saying 'how many you got'?

It doesn't make sense to add them together anymore because the price ranges are so wide. We didn't do it on watch from the beginning. We've never done it on iPod.

As we now step back from the phone, we now have phones being sold in emerging markets like the iPhone 6s for around $300 and so you've got a range from $300 to $1000 or in some cases over $1000 depending upon your selection of [storage]. And so this thing has lost its meaning.

Cook says that the sales data that it was providing to investors was conflating its value and its usefulness to determining the state of Apple's business.

According to Cook, Apple doesn't plan to never comment on units again and will provide data on unit sales if it will better explain results.

Apple is going to make additional disclosures, such as gross margin of services, a business that has grown significantly in recent years.

The quarterly earnings statement will be released at 1:30 PM Pacific/4:30 PM Eastern, with a conference call to discuss the report taking place at 2:00 PM Pacific/5:00 PM Eastern. MacRumors will provide coverage of both the earnings release and conference call on January 29.

Article Link: Apple to Announce Q1 2019 Earnings on January 29, iPhone Unit Sales Won't Be Included

 

[macfacts]

Looks like Tim knew all this when he announced no more numbers regarding iphones sold.

 

[Mike Oxard]

Talking to the Apple store staff, it seems like the battery replacements were the biggest seller towards the end of the year, probably propping up iPhone sales!

 

[Jwil736]

[*]Weak iPhone upgrade numbers in some developed markets due to fewer carrier subsidies and low-priced battery replacements in 2018

Low-priced battery replacements more like the public found out the secret and no longer need a new phone every 2 years.

 

[BootsWalking]

Weak iPhone upgrade numbers in some developed markets due to fewer carrier subsidies and low-priced battery replacements in 2018

It was either that or admit the iPhone 6 series had a design flaw and recall the phones. He simply moved the day of reckoning into the future. Well that future has arrived Timmy.

 

[oliversl]

"Hey Tim, lets sell the iPhone for more than 1k US$!, Yea, lets do that!"

Boom: https://www.apple.com/newsroom/2019/01/letter-from-tim-cook-to-apple-investors/

"Based on these estimates, our revenue will be lower than our original guidance for the quarter, with other items remaining broadly in line with our guidance."

 

[dominiongamma]

Hiding the bad iPhone numbers, Apple was all transparent when making profit on iPhones now they won’t disclose the bad numbers.

 

[DocMultimedia]

Tim is spreading the pain into two, instead of all at once. 1) poor income this quarter crushes stock today, and 2) ugly forecast during earnings call will crush the stock again.

All at one time might have been too painful.

 

[WiiDSmoker]

Beyond the elites, there’s just not enough reason to upgrade anymore. I can afford a $1k phone but why? They have to work for my money, the Xs isn’t it.

 

[Pepe4life]

I watch the keynotes every year. This was the first year where the iPhone announcement was downright embarrassing. Phil the Shill struggled to name a single major feature that made me want to upgrade from my iPhone X.

 

[macfacts]

Interesting that Tim did not list $1k iPhones as a reason for less earnings but listed a $30 discount on battery replacement as a reason for poor earnings.

 

[JosephAW]

Yes but dongle sales are way up!

 

[DocMultimedia]

The "amazing pipeline of new products" was mentioned in his letter. I don't remember him using that lately. Rehashing old phrases.

 

[Jerus]

Am I the only one who thinks that 84 Billion USD is still a pretty good revenue?


Having said that, I am worried about the delay in product launches. Most products seems to be released 1-2 years later that they should. Despite massive investment in R&D. The smart speaker could have been revolutionary if it had been released 2 years earlier. Same with the new Mac Pro.
Unfortunately it’s hard to catch up.
Apple Watch still feels ahead of the competition. Not sure about the rest.

 

[dazz87]

That teenager really did a number on apple huh........

 

[dumastudetto]

Am I the only one who thinks that 84 Billion USD is still a pretty good profit?


Having said that, I am worried about the delay in product launches. Most products seems to be released 1-2 years later that they should. Despite massive investment in R&D. The smart speaker could have been revolutionary if it had been released 2 years earlier. Same with the new Mac Pro.
Unfortunately it’s hard to catch up.
Apple Watch still feels ahead of the competition. Not sure about the rest.

Apple is still making all the money in this industry. So yes, it’s making incredible profits.

 

[XXXXXXXXX]

I mean, there weren’t any new features. It’s the same phone all over again.

 

[pcapes]

Small typo: without specific unite sales data

 

[AutisticGuy]

I know it sounds terrible, but I want a poor earnings report. I want Apple to get the message they are moving in the wrong direction.

 

[XXXXXXXXX]

Interesting that Tim did not list $1k iPhones as a reason for less earnings but listed a $30 discount on battery replacement as a reason for poor earnings.

It’s because he’s not good at his job. He’s good at finding money left on the table via the supply chain but he doesn’t have a clue what he’s doing as CEO. He has never been able to articulate why someone should buy an Apple product. He depends on I’ve for that and that dude is super confused on what people actually want.

 

[Gasu E.]

Am I the only one who thinks that 84 Billion USD is still a pretty good profit?

$84 Billion would be an astonishingly great profit, unprecedented in world history. A profit like that would quadruple Apple stock value, at a bare minimum. But unfortunately, Apple hasn't figured out how to drive their costs to $0.

 

[genovelle]

[*]Weak iPhone upgrade numbers in some developed markets due to fewer carrier subsidies and low-priced battery replacements in 2018

Low-priced battery replacements more like the public found out the secret and no longer need a new phone every 2 years.

The phones affected by the program were 4-5 years old that had batteries that naturally died. I bet going forward this will limit how far Apple will go to try to extend the life of products. They figured out a way to keep phones with spiking batteries from being destroyed by a spike via software and it ended up costing them money to keep customers happy and sales.

 

[Spoon!]

They have never done this. iPhones sold has always been a bragging right for them, especially at keynotes. Obviously they done goofed and need to fix some things.

The phones affected by the program were 4-5 years old that had batteries that naturally died. I bet going forward this will limit how far Apple will go to try to extend the life of products. They figured out a way to keep phones with spiking batteries from being destroyed by a spike via software and it ended up costing them money to keep customers happy and sales.

Happy customers = loyal customers. Even if it doesn't pay off now, it will in the future.

 

[69Mustang]

Am I the only one who thinks that 84 Billion USD is still a pretty good profit?

$84 Billion in a vacuum is good. This isn't a vacuum and that's not how revenue is judged. It's judged by comparing it to past performance (YoY) and future prediction (guidance). Apple wouldn't adjust the revenue down to $84B if they weren't dead sure they were going to hit it. So compared to past performance, it's down. Compared to the original guidance, it's also down.

@macfacts mentioned above that Cook probably already knew this was going to be the case, which is why we saw unconventional carnival barker marketing from Apple in store and online.

Apple is far from doomed, but you can't paint this in a "good" light.

 

[TVreporter]

See Tim all you had to was release an updated iMac!! And maybe the AirPower