Apple Cash Drops 2.2%, Hopeful For Holiday Quarter
Beating analysts expectations, Apple has posted fourth-quarter revenues of $64 billion despite cash reserves declining by 2.2% and the Cupertino company forecasting an “optimistic” holiday quarter.
Apple has revealed its cash on hand reserves have dropped by 2.2% to $205.9 billion from the previous quarter as the company continues its share buyback program that has cost the company a total of $18 billion, with $3.5 billion of dividends paid out.
As reported by Bloomberg, Apple reported Q4 sales of $64 billion, up 1.8%, with net income totalling $13.7 billion, versus $14.1 billion a year prior, a drop of 3%.
According to Reuters, Tim Cook’s fostering relationship with Donald Trump should be praised, citing comments from Hal Eddins, chief economist for Capital Investment Cos, an Apple shareholder.
“Who would have thought he would have been able to thread that needle and deal with the president? It’s a show of an incredible amount of nuance and emotional intelligence to do what’s best for the company.”
Despite his business acumen at home, abroad Chinese market share fell to 5.2% in Q3, while Huawei surged to 42.4% from 24.9% one year earlier, says Canalys data.
Cook is hopeful however that the trade war between China and the US will eventually be resolved, saying ‘I certainly hope it happens during the quarter, but we’ll see about that’.
Fortunately, Tim Cook’s outlook on the new iPhone 11 was off to “a very, very good start.”
Apple generated $33.36 billion in iPhone sales, just a little higher than expectations of $32.42 billion.
Unfortunately for Apple, who no longer reports unit sales, is in its fourth straight year of year-on-year declining iPhone sales as the company attempts to shift focus from its flagship product towards a broader and well-supported product mix.
With sales dwindling in the Mac segment by 5%, generating only $7 billion, Apple will need to do more to bring it in line with the rest of its product mix.
Hopefully the recent passing of FCC certification for the refreshed Mac Pro, and rumoured 16-inch MacBook Pro, will help boost sales in the segment to the levels reported by the wearables segment.
The Wearables, Home, and Accessories segment for Apple increased by 54% generating $6.5 billion of revenue for the company.
With the wearables market expected to reach $52 billion in 2020, according to research by Gartner, Apple will want to continue its efforts in the market segment, of which it held 34% of the 2018 worldwide market according to Canalys.
Increases at home did not, unfortunately, translate abroad, with China revenues declining by 2% to $11.1 billion, with Japanese and European sales also slipping.
Another concern for investors is Apple’s spending on content generation, with John Ham of New England Investment & Retirement Group Inc, stating they would support the Californian company’s venture into streaming content, as long as they “don’t get carried away and start making outsized, egregious deals’.
Apple is forecasting Q1 sales of $85.5 billion to $89.5 billion in sales, well above expectations of $86.9 billion, leading to a share price rise of 2% to $247.50.
Tim Cook is very optimistic about what the holiday quarter has in store, suggesting Apple will return to growth after sales targets were missed during last years holiday period.