On Thursday, 01st of November, the stocks of the Apple technological corporation have fallen down by almost 7%. The securities price has declined by 70 billion US dollars, due to which the total capitalization of this technological giant has once again fallen below the level of 1 trillion US dollars. Friday didn’t recover the price of securities, so according to the result of 4 previous sessions, these securities became one of the downfall leaders within Dow Jones. It is noteworthy that such a significant decline happened against the background of the quarterly reports publication, where the representatives of Apple reported the record-breaking profits.
Why positive statistics of Apple produced no result
Based on the fourth quarter of the financial year, Apple published its financial and statistical reports, according to which it follows that:
– Net profit has increased up to 14.1 billion US dollars, which is 31.8% higher than for the previous financial year;
– Revenues of the company has increased by 20%, which is another record;
– For the current year, the company has shipped more than 2 billion iOS devices.
According to the results of the year, the per-share profit is USD 2.91 compared to USD 2.07 for the previous report period. The company’s representatives stated that most of all they were satisfied with the results of the sales of the company’s top-of-the-line devices. This is particularly about the 29% increase of the sales due to the production of new iPhone XS and iPhone XS Max. At the same time, they didn’t mention that the company supplied the market with only 46.0 million devices, while, according to the experts’ expectations, this number should have been equal to 47.5 million pieces.
The company’s profit has increased due to the growth of the average price of iPhone and due to the growth of the sales of their services, including App Store and Apple Music. In particular, the sales in this area have grown by 17%, although, based on forecasts, this value should have been not lower than 17.2%. The investors were partially satisfied with the fact that Apple had increased its revenues from 9.8 to 11.4 billion US dollars in China, which demonstrated the following: the trade war between the United States of America and China. As well as the stagnation of the Chinese economy had no significant influence on the sales.
In spite of the record-breaking positive statistics, the company’s shares cost has demonstrated the record-breaking decline as well. The reason was a pessimistic forecast for the next quarter and unmet expectations of the current year. The management of Apple warned that the company would hardly meet its investors expectations about the sales in the holiday quarter, and informed about the decrease of the world’s consumer demand (the weakest regions are: Brazil, India and Russia) and about the growth of the foreign exchange cost. The target revenue of the next quarter may amount to around 89 billion US dollars against the projected amount of 89 billion US dollars. That was enough to cast a long shadow on the positive financial statistics.
In the next financial period, Apple will not publish any sales information in pieces. In other words, it will now be more difficult to make any forecast or to evaluate the company’s performance. It is a kind of a signal that Apple acknowledges that it hasn’t been able to meet the expectations of its investors. This situation demonstrates that no positive statistics will ever act as a growth fundamental of the company’s quotes.