Apple to Announce Earnings Today Following First Revenue Warning in 16 Years, End of Unit Sales Reporting

Discussion in 'MacRumors.com News Discussion' started by MacRumors, Jan 29, 2019.

  1. MacRumors macrumors bot

    MacRumors

    Joined:
    Apr 12, 2001
    #1
    [​IMG]


    [​IMG]
    Apple is set to report its earnings results for the first quarter of its 2019 fiscal year at 1:30 p.m. Pacific Time today.

    The quarter began September 30, 2018 and ran through December 29, 2018, according to Apple's fiscal year accounting calendar.

    Apple issued a rare earnings warning for the quarter on January 2, its first in over 16 years. The revised guidance is as follows:revenue of approximately $84 billion
    gross margin of approximately 38 percent
    op. ex. of approximately $8.7 billion
    other income/expense of approximately $550 million
    tax rate of approximately 16.5 percent before discrete itemsApple's initial guidance for the quarter on November 1:revenue between $89 billion and $93 billion
    gross margin between 38 percent and 38.5 percent
    op. ex. between $8.7 billion and $8.8 billion
    other income/expense of $300 million
    tax rate of approximately 16.5 percent before discrete itemsApple's guidance suggests it will report its second-best first quarter results ever, based on revenue, behind its 2018 record of $88.3 billion:
    2015: $74.6 billion
    2016: $75.9 billion
    2017: $78.4 billion
    2018: $88.3 billion
    2019: $84 billionWhat to Look For
    Apple's revised guidance suggests it will report its first holiday quarter sales decline since 2001, although it would still be the company's second-best quarter ever in terms of revenue.
    This is Apple's first earnings report in which it will not disclose iPhone, iPad, or Mac unit sales, a change it announced back on November 1. Apple's financial chief Luca Maestri said Apple may provide qualitative commentary about sales if necessary, so it will be interesting to see how the conference call and question-and-answer session play out.
    In a letter to shareholders on January 2, Apple CEO Tim Cook disclosed that Apple's revenue will be lower than its original guidance for the quarter, coming in at approximately $84 billion. Apple initially guided for revenue of $89 billion to $93 billion in the quarter on November 1. Look for any potential commentary surrounding the shortfall.
    Apple's guidance for its second quarter of fiscal 2019, which began December 30 and so far only encompasses the launch of new Smart Battery Cases for the iPhone XS, iPhone XS Max, and iPhone XR. It could eventually include new iPads, a new iPod touch, new AirPods, the AirPower, more. Analysts expect revenue of around $58.9 billion in the second quarter, compared to $61.1 billion in the year-ago quarter.
    Continued growth of Apple's Services category, including the App Store, Apple Music, iCloud, iTunes, Apple Pay, and AppleCare. Last quarter, Apple's services brought in a record $9.9 billion revenue. Apple has said it is still on target to double its fiscal 2016 services revenue by fiscal 2020. Analysts expect services revenue of around $11 billion in the quarter.
    Continued growth of Apple's Wearable, Home, and Accessories category, previously named Other Products, including the Apple Watch, Apple TV, HomePod, AirPods, Beats, iPod touch, and accessories--particularly as Apple diversifies revenue beyond the iPhone.Apple's CEO Tim Cook and CFO Luca Maestri will discuss the company's earnings results on a conference call at 2:00 p.m. Pacific Time today. MacRumors will loosely transcribe the one-hour call as it occurs live.

    Article Link: Apple to Announce Earnings Today Following First Revenue Warning in 16 Years, End of Unit Sales Reporting
     
  2. Baymowe335, Jan 29, 2019
    Last edited: Jan 29, 2019

    Baymowe335 macrumors 601

    Joined:
    Oct 6, 2017
    #2
    BEFORE everyone freaks out, we are getting more detail on services margin and they will post record EPS.

    Doom and gloomers need to calm down. Too summarize:

    China was over 100% the revenue shortfall and revenue records were still set in the US, Canada, Mexico, Spain, Italy, Germany, Korea, Vietnam, and the Netherlands.

    No, prices aren't too high in all markets and for ones like China, they have priced iPhones more aggressively.

    Other companies have reported significant weakness in China too, including:
    • Apple
    • Nvidia (revised rev down 20%)
    • Caterpillar
    • Samsung
    • Intel
    • FedEx
    • Goodyear
    • Tiffany
    Apple is going to make $20B in profit in 90 days in Q1 2019.

    The stock trades at 10X earnings, so Mr. Market will value earnings over time.

    Stocks go up and down.

    Have a nice day.
     
  3. magicschoolbus macrumors 65816

    magicschoolbus

    Joined:
    May 27, 2014
  4. Hym tix macrumors regular

    Hym tix

    Joined:
    Sep 21, 2012
    #4
    the sad truth:

    Apple's take away from this will be "we made the iPhone X too good, the improvements should have been more incremental" If they did it right, iPhone X would have driven 2018 sales to 84 billion and Xr would have driven 2019 sales to 88.3 billion. Then everyone would have been happy.

    ... except us end-users, because we'll just get more modest tiny upgrades each year.
     
  5. ryanwarsaw macrumors 68020

    ryanwarsaw

    Joined:
    Apr 7, 2007
    #5
    Some investors aren't convinced that China is the whole story. Let's see if they make the 84 or higher. Should be interesting. Anybody buying before earnings? I am leaving it alone for now.
     
  6. The Barron macrumors 6502

    Joined:
    Mar 5, 2009
    #6
    The market always "rewards" Apple with after-hours drop within minutes of releasing their earnings. It will not be any different today at 1:30 PM PST.
     
  7. jamesrick80 macrumors 68020

    jamesrick80

    Joined:
    Sep 12, 2014
    #7
    After these earnings are reported, I expect even more dropping due to the FaceTime Scandal. Their stocks will be affected by it for sure.
     
  8. ryanwarsaw macrumors 68020

    ryanwarsaw

    Joined:
    Apr 7, 2007
    #8
    Not a bad thing if you are looking to buy.
     
  9. Romeo_Nightfall macrumors 6502

    Romeo_Nightfall

    Joined:
    Aug 8, 2018
    Location:
    Vienna
    #9
    Fascinating how many people still,spend huge amount on that electronic waste.
    Our product management guys also have the latest ipads and phones.
     
  10. ThomasJL macrumors 6502a

    Joined:
    Oct 16, 2008
    #10
    One (out of many) reasons why I miss Steve Jobs is because he cared more about customers than shareholders. Tim Cook cares more about shareholders than customers. That’s why Cook raised prices by hundreds of dollars on many of Apple’s products. That’s also why Cook let many of Apple’s less profitable products (such as the Mac Pro, Mac Mini, iPod Touch, etc.) go without updates for many years, while also killing off less profitable product lines like the Cinema Display line and the Airport line. For Cook, it’s profits over people.
     
  11. neoelectronaut macrumors 68030

    neoelectronaut

    Joined:
    Dec 3, 2003
    Location:
    Southeastern Louisiana
  12. ryanwarsaw macrumors 68020

    ryanwarsaw

    Joined:
    Apr 7, 2007
    #12
    This is also not a bad thing. The FT thing is trivial and will not be remembered very long. Go ahead and bake it in now.
     
  13. HJM.NL macrumors 68020

    HJM.NL

    Joined:
    Jul 25, 2016
    Location:
    Netherlands
    #13
    It will start with Cook saying he’s ‘thrilled’ and ending with he has great confidence in Apple and it’s products in the pipeline. Followed with vague answers from questions, blaming the bad economics in China (which predict to grow at a rate of an astonishing 6% throughout 2020). Defending the high prices in the UK for the brexit (which still hasn’t occurred).

    Amazing :rolleyes:
     
  14. azntaiji macrumors member

    Joined:
    Sep 22, 2014
    #14
    Will be interesting to see what they detail on services. Apple is not what it was 10 years ago, and that's with or without Steve Jobs. There has been a huge shift towards services in recent years across the industry, now that hardware innovation has slowed down and cloud/streaming/etc is up. So I think it makes business sense for Apple to allocate more of their efforts towards services — I wonder if they'll mention anything about Apple streaming service
     
  15. cableguy84, Jan 29, 2019
    Last edited: Jan 29, 2019

    cableguy84 macrumors 65816

    cableguy84

    Joined:
    Sep 7, 2015
    #15
    When will all of you 4 inchers realize you are in the minority?
     
  16. ryanwarsaw macrumors 68020

    ryanwarsaw

    Joined:
    Apr 7, 2007
    #16
    Earnings are funner than keynotes. You get to see how thrilled people actually are. Keynotes you get golf claps.
     
  17. keysofanxiety macrumors G3

    keysofanxiety

    Joined:
    Nov 23, 2011
    #17
    I thought 4 inches was the average? :(
     
  18. blacktape242 macrumors 68000

    blacktape242

    Joined:
    Dec 17, 2010
    Location:
    Sacramento, CA
  19. Baymowe335 macrumors 601

    Joined:
    Oct 6, 2017
    #19
    No it won't be. The FaceTime issue has been contained and everyone already knows about it. The stock is flat despite the Nasdaq being down today.
     
  20. DeepIn2U macrumors 603

    DeepIn2U

    Joined:
    May 30, 2002
    Location:
    Toronto, Ontario, Canada
    #20
    Tim will no doubt will HAVE TO provide more in-depth insight or a follow-up to the China lacking sales or stagnant sales position. More information from analysts and investors will be whether or not this is a localized phenomenon or more wide spread.

    I'm going to say this now ... it is more wide spread: China + India and possibly the UK and S.America.

    Oh ... and I've just bought AirPods cause my last one's where given to my son a few months back - his was stolen.

    We're going see more sales marketing incentives for upgrades, deeper partnerships with provider upgrades - which was severely lacking this past 3 quarters outside of the USA.

    The average populace in China, 60 million owners of iPhones, (not just on Shanghai or Hong Kong) have to contend with upgrading at the cost of a full months income!! This is a HUGE issue for Apple if they want the lions share of 1 billion populace.

    potential solutions:
    iPhone SE bring it back at a cheaper price ~ we're seeing this already online only lol.
    iPhone 7 should bring back into production; great tech runs all the modern apps/games/etc long term support still for iOS so this can be brought at a VERY low price or $0/new contract.
    iPhone 8 should also be cheaper ... giving the XR breathing room.

    I don't know about you but with the XR using an IPS-LCD screen and the same ~720p resolution as the 8 ... only FaceID & A12 are the major improvement, major. cheaper to own the 8 and get most of the benefits other than what I've mentioned. Most people want the iPhone X or XS or XS Max; not the XR.

    Apple is doing good changes this past 30 days with the XR pricing and trade in incentives ... but I feel Brightcove should be CUT from the trade in angle it does NOT offer good market value for decent or pristine condition phones to users so they tend to avoid trading in.
     
  21. ryanwarsaw macrumors 68020

    ryanwarsaw

    Joined:
    Apr 7, 2007
    #21
    Nobody knows if to buy or sell at this point. Any bad/mediocre news will make it plunge in an already sour market today. It could go up as well but if anything at all is suspicious don't expect good results. Market is still leery of not disclosing iPhone sales. So things like inventory are going to be scrutinized more so than ever.

    The stock may soar if earnings are beat and the right narrative comes up. The stock is flat because nobody out there knows what to make of it. It's down slightly now.
     
  22. BenTrovato macrumors 68030

    BenTrovato

    Joined:
    Jun 29, 2012
    Location:
    Canada
    #22
    Well written post by MR. Formatting could use some work but I like the blurb
     
  23. Baymowe335 macrumors 601

    Joined:
    Oct 6, 2017
    #23
    I didn't say I knew what would happen to the stock based on the earnings. I've seen stocks go down on great earnings and up on bad earnings. We'll see.

    I did say the FaceTime incident has already been accounted for in the stock because it's now old news. The market doesn't usually care about software bugs.
     
  24. ryanwarsaw macrumors 68020

    ryanwarsaw

    Joined:
    Apr 7, 2007
    #24
    Yeah I also suspect that FT was baked in already. I also don't think the average investor cared much about it.
     
  25. gim macrumors 6502

    gim

    Joined:
    Jul 27, 2014
    #25
    What?
     

Share This Page

127 January 29, 2019