Why Apple shares are selling off

Why Apple shares are selling off”

As the FT reports, CFO Luca Maestri "unexpectedly gave notice" that Apple would stop reporting unit sales for iPhones, iPads and Macs, starting from next quarter. But the growth in the number of iPhone units that the company sold was flat, with the revenue growth largely coming due to increase in the average selling price of the iPhone and momentum with Apple services.

Apple revealed had it sold 46.9 million iPhones during the previous quarter.

The world's most valuable company was a lot less valuable Friday, as a disappointing earnings report from Apple sent its shares tumbling and its total market value below $1 trillion.

Apple crossed the $US1 trillion mark in August - a first for a United States company - after reporting strong second-quarter results.

Walt Piecyk, a respected tech analyst at BTIG Research told the Financial Times, "It's certainly not a good look for Apple in the eyes of consumers when analysts are quoting ASPs [average sales prices] that are rising by double digits ..." "Furthermore, our unit of sale is less relevant for us today than it was in the past, given the breadth of our portfolio and the wider sales price dispersion within any given product line".

"The Street will find this a tough pill to swallow this morning as the transparency of the Cupertino story takes a major dent given that tracking iPhone units has become habitual to any investor that has closely followed the Apple story for the last decade+ and is critical to the thesis".

In an interview with Reuters, CEO Tim Cook blamed this on weakness in emerging markets, foreign exchange costs, and uncertainty whether the iPhone maker can keep up with demand for new products. The period included about a week and a half of sales of the high-end iPhone XS and iPhone XS Max models. Revenue was up 20 percent YoY to $62.9 billion, with earnings per share of $2.91, up 41 percent. The iPhone still looms large over Apple's fortunes, accounting for more than 60 percent of revenues.

Despite the falling shares, this was Apple's best-ever fourth quarter. That's a nice jump for a category that saw its lowest sales numbers since 2010 in the third quarter. If you're wondering "Why fourth quarter?", it's because the fiscal 2018 ends three months earlier than the calendar 2018.

"Apple will have trouble maintaining its recent valuation bump if the market clearly sees declines in shipments", said analyst Richard Windsor on his Radio Free Mobile blog.

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