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Apple, The company, which was once known for its $ 1 trillion market capitalization, will today release its first quarter results of 2019 for its holiday quarter and could well have the health of world markets by train. to weigh on the financial aspect.
No pressure.
Earlier this month, Apple's chief executive, Tim Cook, sent a letter to investors, easing the forecast for the first quarter from $ 89 billion to $ 93 billion to only $ 84 billion. Given that the company has revised its forecasts just a few weeks ago, there is no reason to expect a significant loss of revenue for the company, even if the situation is likely to deteriorate if company is pessimistic in its second quarter outlook or lack elsewhere.
Apple's stock price has risen nearly 10% when Cook's letter to investors was released, a decline that has been the company's worst dive for more than five years. The stock largely recovered in the following weeks, but is recovering from its 52-week low earlier this month, down nearly 40% from October's peak.
Analysts will certainly dig into the numbers today to get an idea of the company's mobile business health, but they will have less data than ever before to make those decisions.
At the last call of the investors, Apple announced that it would not report its unit sales in the next quarterly earnings reports, which means that you will not see any glitzy ads' XX.X iPhones sold by Apple this quarter "in your calendar. . For now, we only work with revenue figures, even though Apple says its financial success is less closely related to unit sales, which is probably due to the fact that it is not the same. widening of the price range in its categories of appliances and a general upward trend. in the average selling prices of these products.
Despite the lag in unit sales, many badysts will in any case look at a single figure this quarter: Greater China's business figure.
In Cook's letter to investors, he said the "economic weakness of some emerging markets" had "had a much greater impact than expected." India and China have been two extremely difficult markets for Apple to break through, while the company has In China, it seems that growth has slowed down. Cook even claimed that most of the reduction in the company's goals resulted from declining iPhone revenues in Greater China.
Investors will have to judge whether the decline in revenues is the result of weariness related to ongoing trade negotiations between the United States and China, the general slowdown in China's economic growth rate or what may be the more scary for investors, just lost hold on Chinese consumer technology companies. This is obviously a combination, but you can expect Apple to highlight external factors as much as possible.
The first quarter of 2019 was also the first full quarter of sales of the latest three models of Apple's smartphones, the iPhone XS, the iPhone XS Max and the iPhone XR. So we will probably have the best overview of the evolution of new models and the upgrade of existing users. in developed markets. In its letter of investment, Cook appeared to cover its risks, noting that a number of macroeconomic trends and more complex factors such as consumers taking advantage of Apple's $ 29 battery replacement program had impacted iPhone upgrades.
The ability of the iPhone to continue to grow in its key markets will obviously be very critical for Apple. Apple's transition to a service company has always been based on the fact that iPhone revenues continue to increase, but that the revenues of the Services are growing even faster. If it turns out that there are essential heat sinks for Apple in its vertical hardware segments, it is obvious that these trends will keep downward pressure on the stock.
We'll see how the Cupertino consumer giant will make a profit after today's bell. Come back here to see how Apple is doing.
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