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Apple said it would no longer break out device unit sales in future financial results.
Photo:
Martyn Landi/Zuma Press
The world’s largest tech company had been spared most of the pain of one of the worst selloffs in the sector’s history. But even for
Apple
Inc., the bill eventually comes due.
Apple’s share price slumped after hours Thursday following the company’s fiscal fourth-quarter results. The reaction was caused by two things: a disappointing revenue outlook for the December quarter, which will include the launch of its latest iPhone, and a surprise announcement that the company will no longer break out device unit sales in future financial results. It bears noting that Apple sold more than $228 billion worth of iPhones, iPads, Macs, Watches and other items in its most recent fiscal year, accounting for more than 85% of the company’s total revenue.
The decision, in other words, will sharply limit investors’ ability to understand the main drivers of the world’s most valuable company. And those drivers are important. Apple has received due credit over the past year for its ability to grow device revenues despite relatively flat unit sales, mainly from boosting prices. Apple’s share price had gained more than 31% for the year ahead of Thursday’s report, and the stock survived last month’s tech selloff with only a 3% drop. The Nasdaq Composite was down 9.2% for the month.
But Apple’s forecast for the December quarter suggests the gains the company has enjoyed from goosing its prices may be ebbing. Revenue is expected to come in a range of $89 billion to $93 billion for the current quarter, suggesting a gain of only 3% year-over-year at the midpoint. That follows five consecutive periods of double-digit percentage gains, and even includes the launch of a new iPhone, iPad and MacBook Air in the period. Those devices still may end up selling well. But Apple has made sure investors will have a harder time figuring that out. At this point, the stock deserves to lose some of its shine.
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