Apple Shares Dive 7%, Won’t Report iPhone Unit Sales Again
Shares in Apple dived over 7% following Q4 earnings, and a light holiday sales forecast. The Californian giant has also advised it will no longer report units sales of its main hardware division – e.g. iPhone, Mac and iPad.
The share tumble caused Apple’s market value to dip below its history-making trillion dollar mark.
Apple’s reporting change comes as unit sales remain relatively stagnant year-on-year, with iPhone shipments missing consensus estimates – 46.89 million versus 47.5 million.
Despite flat volumes, a notable jump in Apple hardware prices culminated in a ~30% revenue jump.
Concerning US pricing, Apple raised the price of its next-generation iPad Pro by ~25%, and the new Macbook Air by 20%. It follows the release of its US$1,449 iPhone XS Max.
The strategy has culminated in higher profits and an average selling price (ASP) of US$793 – a whopping 28% year-on-year increase, beating analyst expectations for US$750.78.
Q4 revenues notched US$62.9 billion, also trumping analyst projections for US$61.57 billion.
Earnings also beat analyst forecasts – achieving US$2.91 per share, versus consensus estimates of $2.78.
Concerning future guidance, Apple expects Q1 total revenue to notch US$89 billion – US$93 billion. The top end mirrors analyst projections for US$93 billion.
Concurrent with stagnant hardware sales, Apple claims this will be the last time it reports unit sales. From next quarter, the tech giant will provide one revenue figure, encompassing its three main product lines (iPad, iPhone, Mac).
“If you look at our net income during the last three years, if you look at our stock price in the last three years, there’s no correlation to the units sold in any given period,” claims Apple CFO, Luca Maestri, during its LIVE earnings call.
“… take the last three years for example, the number of units sold during any quarter has not been necessarily representative of the underlying strength of our business.”
For the quarter, Apple sold 9.7 million iPads, notching US$4.09 billion in revenue.
The company sold 5.3 million Macs for US$7.41 billion in revenue.
Apple’s ‘Other Product’ division (which includes AirPods, Apple Watches and HomePods) achieved a 31% year-on-year jump in Q4 revenue to US$4.23 billion.
Whilst not providing revenue figures for wearable devices, Apple claims the category has grown 50% year-on-year.