Apple calls for lower-than-expected Q2 guidance on iPhone sales miss

Posted:
in AAPL Investors edited February 1
Despite Apple's revenue rising 13 percent year-over-year during the December quarter and setting a new record, about $88.3 billion, the company is guiding between $60 billion and $62 billion in revenue for the March quarter -- below market forecasts.




Analysts had been expecting Apple to reach $65 billion. The company is additionally predicting a gross profit margin between 38 and 38.5 percent, and operating expenses between $7.6 billion and $7.7 billion.

The situation could spook investors, as the company also reported a year-over-year decline in iPhone units during the December quarter from 78.29 million to 77.316 million. In theory the company should have been riding high, having launched not one but three devices last fall: the iPhone 8, 8 Plus, and X.

In fact Apple recorded 13 weeks this year versus 14 in 2016, and the company saw iPhone revenues grow 13.2 percent to $61.576 billion, suggesting impact from higher base prices and/or people skewing towards more expensive models. In announcing Q1 results, Apple CEO Tim Cook noted that the $999-plus iPhone X outsold all other models every week after its November launch.

Some analysts have worried that the price of the iPhone X may be scaring away buyers. Earlier this week, Japan's Nikkei claimed that Apple is cutting production in half, though later reports have cast doubt on the idea.
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Comments

  • Reply 1 of 32
    "The situation could spook investors, as the company also reported a year-over-year decline in iPhone units during the December quarter from 78.29 million to 77.316 million" ... I think it's important to remember that this year's quarter was 13 weeks compared to last year's quarter of 14 weeks. Won't change the minds of the doomsayers though.
    edited February 1 douglas baileymejsricmavemufcSpamSandwichjony0thinkman@chartermi.netlollivercrossladmagman1979watto_cobra
  • Reply 2 of 32
    Btw guidance of 60-62B would mean YOY revenue increase of 14-17% Wall Street’s 65B would be a 24% increase. I believe the last time Apple reported a YOY increase that high was the March 2015 quarter with 27%. What is Wall Street basing its 65B on?
    trashman69jony0anantksundaramthinkman@chartermi.netLukeCagebshankmagman1979
  • Reply 3 of 32
    NY1822NY1822 Posts: 515member
    13 weeks VS 14 weeks....
    douglas baileycrossladretrogustojony0anantksundaramthinkman@chartermi.netmagman1979watto_cobra
  • Reply 4 of 32
    Hey, I think it would be worth rewriting the article since, you know, 13 weeks vs 14 weeks.
    crossladSpamSandwichanantksundaramthinkman@chartermi.netmagman1979watto_cobra
  • Reply 5 of 32
    Btw guidance of 60-62B would mean YOY revenue increase of 14-17% Wall Street’s 65B would be a 24% increase. I believe the last time Apple reported a YOY increase that high was the March 2015 quarter with 27%. What is Wall Street basing its 65B on?
    Wall Street is as clueless as us mere mortals
    thinkman@chartermi.netlolliverwatto_cobra
  • Reply 6 of 32
    tundraboytundraboy Posts: 1,580member
    It's not an Apple sales miss, it's an analysts' forecast miss.  Don't feed the analysts' pretension that if their forecast is wrong, it's the subject company's fault.
    ericthehalfbeeretrogustopalomineSpamSandwichsuddenly newtondouglas baileyjony0anantksundaramthinkman@chartermi.netRonnnieO
  • Reply 7 of 32
    In december in the four biggest markets the five best selling phones were iPhones, Tim said in the conference call. Time to sell those shares, most analysts will advise, I guess. 
    watto_cobra
  • Reply 8 of 32
    "The situation could spook investors, as the company also reported a year-over-year decline in iPhone units during the December quarter from 78.29 million to 77.316 million" ... I think it's important to remember that this year's quarter was 13 weeks compared to last year's quarter of 14 weeks. Won't change the minds of the doomsayers though.
    I forgot it was a week shorter, that’s a good point actually.
    watto_cobra
  • Reply 9 of 32
    slurpyslurpy Posts: 5,030member
    Why are "market forecasts" positioned as some kind of "truth" or divine expectation? They're numbers that clueless clowns, who are more often wrong than right, pull from their asses. So I never understand why they hold more weight than Apple's own guidance, and why Apple should be punished for not matching random shit that these analysts come up with.
    lolliverRonnnieOnetmagemagman1979watto_cobra
  • Reply 10 of 32
    These analysts amount to not much more than insider manipulators. Us common folk pay the price.
    watto_cobra
  • Reply 11 of 32
    tundraboy said:
    It's not an Apple sales miss, it's an analysts' forecast miss.  Don't feed the analysts' pretension that if their forecast is wrong, it's the subject company's fault.
    Exactly. Everyone, including you and me, could do Apple forecast as well and later claimed it to miss. I forecast Apple revenue increase by 100% next quarter, and when it missed, I want to see it on the headlines of every major news for the latest Apple's Doom Day story. 
    netmagemagman1979watto_cobra
  • Reply 12 of 32
    tundraboy said:
    It's not an Apple sales miss, it's an analysts' forecast miss.  Don't feed the analysts' pretension that if their forecast is wrong, it's the subject company's fault.
    Correct. The real question is, did Apple hit their own guidance numbers?
    edited February 1 douglas baileylolliverbshankwatto_cobra
  • Reply 13 of 32
    jungmarkjungmark Posts: 6,548member
    Sorry, the analysts “missed” in their predictions. Apple did not. 

    And when you’re grabbing billions of dollars in profit hand over fist, why are units still considered an important barometer?
    anantksundaramlollivernetmageLukeCagemagman1979watto_cobra
  • Reply 14 of 32
    With the iPhone X, I thought the profit margin should be nearing 40% now. 
  • Reply 15 of 32
    jungmark said:
    Sorry, the analysts “missed” in their predictions. Apple did not. 

    And when you’re grabbing billions of dollars in profit hand over fist, why are units still considered an important barometer?
    The March quarter isn’t over so we don’t know if Apple will or not.
  • Reply 16 of 32
    By all means...SELL, SELL, SELL!  My stock holding very much appreciated your move! ;)
  • Reply 17 of 32
    maestro64maestro64 Posts: 4,234member
    Let's not forget the analysis successfully drove down the stock 10% and they got their friends in at lower price so it will be time to drive it back up since the stock did not tank in the after hours.
    watto_cobra
  • Reply 18 of 32
    jony0jony0 Posts: 267member
    Btw guidance of 60-62B would mean YOY revenue increase of 14-17% Wall Street’s 65B would be a 24% increase. I believe the last time Apple reported a YOY increase that high was the March 2015 quarter with 27%. What is Wall Street basing its 65B on?
    They base it on their usual unrealistic guidance to fulfill their usual expectation for Apple to fail.
    edited February 1 lolliverwatto_cobra
  • Reply 19 of 32
    MplsPMplsP Posts: 572member
    The iPhone X was supposedly selling poorly, then it was supposedly selling well, now it's selling poorly again? I'm confused? ..wait - never mind. I don't give a rat's patootie about what APPL is trading at, I just care about what phone and laptop I'm going to buy. 
    watto_cobra
  • Reply 20 of 32
    1 week shorter is significant, as pointed out at the very beginning of the call by the woman who initiated the call. Potentially, numbers wise it would translate to:
    1week/14weeks= 7% less duration, so if we adjust today's quote of 77.3 million iPhone sold, we would get 77.3 M+(77.3*7%) = 82.7 M.
    This would mean that on equal basis of 14 weeks, this 1st quarter was potentially 5.6% higher iPhone sales YOY:  (82.7-78.3)/78.3=5.6%.

    magman1979watto_cobrafastasleep
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