Apple: The one thing nobody is mentioning

“In one week we’ll get an earnings report from Apple. There are many key items investors are discussing, from sales of the new Watch to how this year’s iPhone launch timeline will impact quarterly sales,” Bill Maurer writes for Seeking Alpha.

“We’ve also seen a ton of discussion on the growth slowdown in China and how it will impact one of Apple’s biggest markets,” Maurer writes. “But in all of this discussion, one key item has not received much coverage, and it is one that probably will have a large impact on the company’s results.”

“I’m talking about the impact of currencies, which has been a significant headwind for Apple and many other US firms over the past year,” Maurer writes. “The strengthening in the dollar has knocked off several percentage points of revenue growth for Apple, which translates into a couple of billion dollars each quarter. The good news for Apple is that the US dollar currency index (‘DCI’) has weakened a couple of percent since the company’s Q3 report in July.”

Read more in the full article here.

MacDailyNews Take: Luca Maestri talks about currency headwinds all the time. We expect to hear more about them during Apple’s conference call on October 27th.

SEE ALSO:
Apple to release Q415 earnings, webcast live conference call on October 27th – October 8, 2015

15 Comments

    1. In this case, it’s Janet Yellen’s fault.

      Obama appointed her of course, but its not like he knows any better than to support more of the same from the Fed.

      Chalk this one up to incompetence on Obama’s part, and malice on Yellen’s part.

      -jcr

      1. You Got That Right and Stevie were being sarcastic – everything in the world was Bush’s fault for years, now the same is starting to be said for Obama. But John C’s comment is just silly.
        While Fed Governors are appointed and approved by politicians, it is dead wrong to believe that politics drives policy decisions of a Fed Chairperson. It’s actually the independence (from political influence or meddling) that the politicians so regularly rail against the organization about.
        So John, you can try being funny or factual, but your comment gets neither right.

        1. Rob, it seems that you’ve swallowed the party line on what the Fed is all about. I suggest you read up on it before you embarrass yourself like this again.

          The Fed’s purpose is, and has always been, to loot all holders of US dollars by inflating the currency for the benefit of the banks which own it. Politicians go along with this, because inflation benefits profligate borrowers (like the Federal government, and the largest bribe payers, such as Obama’s friends at Goldman Sachs.)

          -jcr

          1. Sure pal, whatever you say. Sounds like you’re a real knowledgeable about the place. I’ve only worked there for a few decades, so what would I happen to know about it that an armchair expert like yourself couldn’t correct me on. I bow to you sir. /s

  1. Currency is one of many factors that can affect corporate performance and stock prices. But I do not believe that it is a major factor is comparison to that typical ones – iPhone sales, iPad sales, Mac sales, and future projections.

    1. Those deals are inked in US$ usually. More profits will go to component manufacturers.

      Lower US$ profits go to Apple as they are forced to increase the price of products in other countries. How many people do you think will buy the Magic Trackpad for $169 CAD?

    2. Wouldn’t it make sense for Apple to pay for components where they will be used in assembly or in the components’ country of origin? In such a case having a strong dollar makes no difference. They have all that cash out there, make use of it.

  2. As a UK based investor in AAPL, I’ve always had to allow for currency fluctuations. The value to me of my shares has three variables instead of the two that US investors face.

    The key factor is apple’s performance. The second factor is Wall Street’s perception of Apple’s performance, but for those of us overseas, the third factor of currency fluctuations can be a hugely significant factor when it comes to buying and selling AAPL.

    There have been times when AAPL has risen nicely, but a weakening dollar has negated that rise. At other times, AAPL has fallen, while the dollar has risen, so my investments go up anyway. I remember a time when AAPL was far too underpriced and the dollar was also low against the GB Pound, so I was able to buy a lot of shares at a good price and was thankful that I didn’t need to sell. Once in a while AAPL is on a run and the dollar rises too, so I end up in clover.

    Owning AAPL is a bumpy ride at the best of times, but owning AAPL when you don’t live in the US can be even more hair raising.

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