AAPL Sales Fall for 3rd Straight Quarter
Although Apple Inc. (NASDAQ:AAPL) delivered earnings above what analysts expected in the final fiscal quarter of the year, the company’s share price slid two percent after hours.
Investors were not impressed by revenue, which, despite having met analysts’ forecasts, showed that Apple’s falling revenues represent a de facto trend. (Source: “Apple’s Tim Cook: ‘We’re returning to growth’,” CNBC, October 25, 2016.)
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Some analysts were able to dismiss the second-quarter decline in “iPhone” sales and its impact on revenues, but those excuses became harder to make once it happened again in the third quarter.
Now that revenues have slipped for the third straight quarter, those folks are running short on excuses as to why Apple deserves its valuation. Sales were 8.9% lower on a year- over-year basis, coming in at $46.9 billion. It is low, considering that the company pulled in $75.9 billion just two quarters ago.T
That being said, it was only a hair less than the $46.94 billion predicted by analysts.
Unsurprisingly (at this point), iPhone sales slipped five percent from 48.04 million units a year ago to 45.5 million units this year. Since the market had only expected 44.8 million iPhones to be delivered in the quarter, there was a brief spike in Apple’s share price.
That was before markets absorbed the full extent of the report.
For more than a decade, Apple was the market’s golden goose, so it has taken some time for investors to accept that the company’s long-term trajectory has turned negative. But that narrative is finally taking hold, which is why CEO Tim Cook is out and about, doing full-on damage control.
Cook tried to pivot towards the future of Apple stock, saying that consumer demand for the “iPhone 7” and “iPhone 7 Plus” has been “very positive.” He even suggested that Apple’s problem has nothing to do with falling demand, but rather with the difficulty of shipping enough devices to meet demand.
Credits: Pixabay.com/YS-Park
In light of the recent quarters, this level of optimism is designed to bait investors who long for the Apple stock they used to know.
“It’s very hard to gauge demand, as you know, when you’re selling everything you’re making,” Cook said. “So we’ll find out more through the quarter, but we’re confident enough to give you guys guidance that we’re returning to growth this quarter, which obviously feels very good for us.”
