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

[BuddyTronic]

When will all of you 4 inchers realize you are in the minority?

I don’t think it matters about that, they could still make a really cool iPhone mini. Small screen but edge to edge. Really strong housing, waterproof, light and thin of course. Latest camera. Big price. Why not design and make it? Confusion of customers maybe? I like a bit bigger screen, but I can see that some people want the old SE form factor. I wonder if the make it a super mini iPhone with big price these fans will freak out? Do these same users want a cheap price too?

 

[Baymowe335]

You tend to state your opinions as if they are facts. Unless you work at Apple in an executive position you offer nothing more than mere speculation the same as the rest of us. You talk to people like they are little children which also doesn't help.

Everything I posted was a fact, down to the "over 100%" language, from Apple.

People hear "revenue miss" and they immediately start supporting their "SEE, SEE, PRICE!!" narrative and doom and gloom.

It's important to note over 100% of the y/y revenue decline was China specific and many markets set records. Those are not opinions. They are detail to the overall global story, important to know.

People don't understand basic math, financial fundamentals, etc. I am trying to educate and inform, but many don't want to hear facts. They want to criticize me for saying something "illogical" like "over 100%" because they don't live in this world. Instead of trying to learn, they cling to their uninformed view that tends to support their narrative.

I'm on record saying I'm disappointed with Apple's execution in China and that they need to fix it. It IS a China issue though.

 

[Shanghaichica]

This will mark the beginning of the end for Apple. People have wisened up to the fraud and hubris of Apple. People want technology and power: Samsung. Apple’s logo has become a parody in itself. An iPhone at $1,500, Apple has priced out even the hardcore fan base.

Gimmicks like FaceID, 3D Touch, Force Touch, Touch Bar are not innovations. Apple Watch will not improve health and welfare because no one cares about crap like that.

How about an OLED iMac and MacBook with a Blu-ray drive? Innovation. How about a quarter-inch thick iPhone with 24 hours of battery and no camera bump priced at $500? Innovation. How about a powerful graphics card in the iMac so I can play Overwatch? Innovation.

Samsung’s sales are declining too.

 

[ftaok]

For those who didn't understand Tim Cook's comment about "more than 100% of the revenue shortfall was due to China" ...

Apple guided $89 to $93B in revenues for Q1 back in November. Earlier this month, they revised the guidance to $84B.

Cook said that more than 100% of the shortfall was due to lower revenues in China.

Using $89B as the baseline and $84B as the new guidance, the shortfall in revenue is $5B. So what happened is that back in November, Apple figured that China revenue would be $X. In January as real numbers were coming in (but not finalized), the projected revenue for China would be $X - $5B (actually a little more than $5B).

Using numbers. Lets say that Apple expected $9B in China revenues and the actual revenues were $3.8B. That's a shortfall of $5.2B. Therefore, China represents 104% of the revenue shortfall.

EDIT - @Carnegie was kind enough to point out my misinterpretation of Tim Cook's statement. The "more than 100%" comment was in reference to iPhone revenues in China from Q1-2018 to Q1-2019.

 

[BuddyTronic]

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

How come you do not mention in this article in Tim Cook’s “letter to shareholders“ that he mentions Apple is very likely to have all time RECORD EARNINGS ?

Light revenue but record earnings.

This is Macrumors but your article is no better than CNBC I’d say. Are you blind to what Tim Cook said? Or just parroting what all the other mainstream media says? RECORD EARNINGS LIKELY is what Tim Cook also said in his letter and statements!!!

This riles me up but I was hoping at least here you’d get it right.

 

[thasan]

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.

Sell now. Buy after it drops 10% regardless of whatever they announce. Me? I can’t afford to sell. I lost too much already )

 

[aliensporebomb]

Translation: "we're very sorry we're not dirty rotten filthy thinking rich this time, just rotten filthy stinking rich."

 

[ryanwarsaw]

Sell now. Buy after it drops 10% regardless of whatever they announce. Me? I can’t afford to sell. I lost too much already )

I am actually hoping it drops 10%. I am looking to buy. If it goes up that's fine too. If it only moves a percent in one direction or the other I won't know how to proceed. lol

Just for added fun we have the fed decision tomorrow.

 

[joeblow7777]

For those who didn't understand Tim Cook's comment about "more than 100% of the revenue shortfall was due to China" ...

Apple guided $89 to $93B in revenues for Q1 back in November. Earlier this month, they revised the guidance to $84B.

Cook said that more than 100% of the shortfall was due to lower revenues in China.

Using $89B as the baseline and $84B as the new guidance, the shortfall in revenue is $5B. So what happened is that back in November, Apple figured that China revenue would be $X. In January as real numbers were coming in (but not finalized), the projected revenue for China would be $X - $5B (actually a little more than $5B).

Using numbers. Lets say that Apple expected $9B in China revenues and the actual revenues were $3.8B. That's a shortfall of $5.2B. Therefore, China represents 104% of the revenue shortfall.

Props to you for being the first person who actually explained what the statement meant as opposed to others who just got very defensive and said things to effect of "it's your own fault for being too dumb to understand" whenever someone expressed confusion.

 

[Baymowe335]

This will mark the beginning of the end for Apple. People have wisened up to the fraud and hubris of Apple. People want technology and power: Samsung. Apple’s logo has become a parody in itself. An iPhone at $1,500, Apple has priced out even the hardcore fan base.

Gimmicks like FaceID, 3D Touch, Force Touch, Touch Bar are not innovations. Apple Watch will not improve health and welfare because no one cares about crap like that.

How about an OLED iMac and MacBook with a Blu-ray drive? Innovation. How about a quarter-inch thick iPhone with 24 hours of battery and no camera bump priced at $500? Innovation. How about a powerful graphics card in the iMac so I can play Overwatch? Innovation.

Haha, yeah...they are close to the end with $20B of profit in 90 days and $84B in sales.

What do you even mean the "beginning of the end?" So they are going to zero? What is your horizon? The company will fail, "some day?"

You doom and gloomers are all the same. General prognostications based on nothing.

There is innovation all over the place. Your failure to care or recognize it doesn't mean it's not happening.

Oh yeah, a MacBook with a Blue-ray drive. WOW!! That's innovation. The most secure way to unlock a device, pay at a terminal, and still hasn't been replicated by Android isn't innovative, but a drive that's been around 20 years in a laptop would be?

Silicon...THE best in the industry.
Neural Engine
Embedded Security on the silicon
AirPods
Watch
FaceID
ApplePay

Just a few of the innovations at Apple.

 

[Cosmosent]

Off the Radar of just about everyone, but should NOT be.

NO ONE should be surprised if AAPL announces they are moving to Annual Guidance !

Cook's #1 priority is keeping his job, NOT making Shareholders happy, NOR AAPL's customers !

If AAPL announces "the move," I predict the share price will Quickly Tank to below $100/share !

NOT Rocket Science, it will signal Cook's AAPL is "Running for the Hills" !

It's just a matter of time before Cook is forced out by the AAPL Board ... may happen later this week ... should have happened years ago !

Cook's main limitation is He Lacks Basic Common Sense !

 

[ZivaD]

Think different not just think slightly faster chip, thinner or new colour.
Innovate not stagnate.

 

[sw1tcher]

BEFORE everyone freaks out, we are getting more detail on services margin and they will post record EPS.

Record EPS due to manipulation from their massive stock buyback program (not from strong sales and operational efficiencies) which ended up being a bad investment.

https://forums.appleinsider.com/dis...program-called-a-bad-investment-in-new-report

 

[ryanwarsaw]

Off the Radar of just about everyone, but should NOT be.

NO ONE should be surprised if AAPL announces they are moving to Annual Guidance !

Cook's #1 priority is keeping his job, NOT making Shareholders happy, NOR AAPL's customers !

If AAPL announces "the move," I predict the share price will Quickly Tank to below $100/share !

NOT Rocket Science, it will signal Cook's AAPL is "Running for the Hills" !

It's just a matter of time before Cook is forced out by the AAPL Board ... may happen later this week ... should have happened years ago !

Cook's main limitation is He Lacks Basic Common Sense !

Under a $100 a share? I would borrow money to buy it at that point. LOL Stock is slowly moving south as the scared money leaves in the last few minutes before the bell. This really is more fun than a keynote.

 

[ftaok]

Props to you for being the first person who actually explained what the statement meant as opposed to others who just got very defensive and said things to effect of "it's your own fault for being too dumb to understand" whenever someone expressed confusion.

Thanks. But to be fair to baymowe335, that other commenter didn't respond fairly. It was a "What?" as if baymowe said something ridiculous. Then the commenter doubled-down.

If the commenter didn't understand the meaning of "more than 100%" in the context that Tim Cook used, then he/she should have asked the question.

The MR community is a pretty good one, but certain topics bring out the most toxic elements (note that I'm not saying that anything on this thread was remotely toxic). When the discussion about the stock and finance happens, there is a contingent on the anti-Apple side that will blame high-prices for all of Apple's ills. Combine that with the stock market "trolls" and "agitators", and it gets hard to separate genuine comments from everything else.

Anyways, just my opinion. I personally try to keep it civil and nice, but I've been guilty at times for bad behavior.

 

[gim]

For those who didn't understand Tim Cook's comment about "more than 100% of the revenue shortfall was due to China" ...

Apple guided $89 to $93B in revenues for Q1 back in November. Earlier this month, they revised the guidance to $84B.

Cook said that more than 100% of the shortfall was due to lower revenues in China.

Using $89B as the baseline and $84B as the new guidance, the shortfall in revenue is $5B. So what happened is that back in November, Apple figured that China revenue would be $X. In January as real numbers were coming in (but not finalized), the projected revenue for China would be $X - $5B (actually a little more than $5B).

Using numbers. Lets say that Apple expected $9B in China revenues and the actual revenues were $3.8B. That's a shortfall of $5.2B. Therefore, China represents 104% of the revenue shortfall.

A shortfall is a deficit. No factor can be responsible for more than the entire deficit (100%), even if they have made more money elsewhere to balance some of the revenue losses in China.

This isn't about math, it's the semantics that do not make any sense.

 

[Baymowe335]

Record EPS due to manipulation from their massive stock buyback program (not from strong sales and operational efficiencies) which ended up being a bad investment.

https://forums.appleinsider.com/dis...program-called-a-bad-investment-in-new-report

The buyback is being done for the long term. Reducing share count is permanent and is not “manipulation.” Its what companies with low valuations should do with excess cash and Apple literally has too much cash.

If Warren Buffett buys back shares in Berkshire and supports them, who am I to argue against it? Apple is a cheap stock...they should be buying all they can, particularly at these levels.

 

[The Game 161]

I’m people will overreact no matter what....

 

[Baymowe335]

A shortfall is a deficit. No factor can be responsible for more than the entire deficit (100%), even if they have made more money elsewhere to balance some of the revenue losses in China.

This isn't about math, it's the semantics that do not make any sense.

You're still missing how this is calculated.

The deficit in question is the shortfall, or y/y decline in revenue. If the revenue number was $88.1B last year and they post $84B this quarter, the y/y decline is $4.1B.

So if the decline in China was over $4.1B...now do you see? They are saying China declined over $4.1B.

Remember, the other numbers in other markets can move too.

Not trying to be rude.

 

[joeblow7777]

Thanks. But to be fair to baymowe335, that other commenter didn't respond fairly. It was a "What?" as if baymowe said something ridiculous. Then the commenter doubled-down.

If the commenter didn't understand the meaning of "more than 100%" in the context that Tim Cook used, then he/she should have asked the question.

The MR community is a pretty good one, but certain topics bring out the most toxic elements (note that I'm not saying that anything on this thread was remotely toxic). When the discussion about the stock and finance happens, there is a contingent on the anti-Apple side that will blame high-prices for all of Apple's ills. Combine that with the stock market "trolls" and "agitators", and it gets hard to separate genuine comments from everything else.

Anyways, just my opinion. I personally try to keep it civil and nice, but I've been guilty at times for bad behavior.

You're right. I hope that I haven't added fuel to the fire, but I really did appreciate the clear explanation.

 

[nvmls]

Keep it up Tim Cook. You’re doing an incredible job!

 

[Mosey Potter]

Under a $100 a share? I would borrow money to buy it at that point. LOL Stock is slowly moving south as the scared money leaves in the last few minutes before the bell. This really is more fun than a keynote.

I hope you are kidding about borrowing money to buy stock, Apple or any stock for that matter. Borrowing money to buy stocks is a very slippery slope especially in the current market environment. Be careful!

 

[ryanwarsaw]

I hope you are kidding about borrowing money to buy stock, Apple or any stock for that matter. Borrowing money to buy stocks is a very slippery slope especially in the current market environment. Be careful!

I am kidding. Although a lot of people buy on margins including myself. I do also make sure I plan to pay my margins down and keep it with in limits that should I ever get a margin call I won't be forced to liquidate.

 

[Neepman]

Why didnt I dump my stock at 220?

 

[ftaok]

Record EPS due to manipulation from their massive stock buyback program (not from strong sales and operational efficiencies) which ended up being a bad investment.

https://forums.appleinsider.com/dis...program-called-a-bad-investment-in-new-report

OK, I'll bite. Using the numbers from Tim Cook's letter from earlier this month, I calculate the following.

Net Income (aka Earnings) - $19.9 Billion
EPS (using 4.77 billion shares) - $4.16

So while it's true that the record EPS can be directly attributed to the stock buyback, the raw number (Net Income) is still pretty dang high. The all-time record for Net Income in a quarter was Q1-2018 ($20.1 Billion). We're looking at the 2nd highest of all time at $19.9 Billion, which exceeds Q1-17 and Q1-16 ($17.9B and $18.4B respectively).

There's nothing deceptive going on with the buyback. Apple just generates so much cash and without anything to spend it on, Wall St. saw it as a negative. Think about it this way. Had Apple not done any buyback, AAPL's market cap would still be above $1Trillion.