“The mix-up started Jan 2, when Apple shared a sneak peek of its first-quarter services business’s performance in a letter to shareholders, projecting that it generated about $10.8 billion in revenue. That estimate was above analyst expectations,” Shumsky reports. “The letter, however, left out an important detail: Its services revenue was calculated using new revenue-recognition rules, which were put in place by standard-setters to add uniformity to how and when companies record revenues for goods and services.”
“Some analysts assumed Apple’s letter was applying the old accounting standard, which would have put the figure closer to $10.2 billion, which was below analyst expectations,” Shumsky reports. “During the company’s November earnings call, Mr. Maestri said Apple would begin reporting under the new standard starting with the first quarter of fiscal 2019. The disclosure also was part of the company’s 2018 annual report. Some analysts remembered that disclosure… A reminder of the accounting change in Apple’s letter would have been helpful, if not expected, analysts said.”
Read more in the full article here.
MacDailyNews Take: Not Apple’s fault. Some Apple analysts are confused. As usual.