What to look for in Apple’s earnings report tomorrow

“Apple Inc.’s shares have taken a beating, falling 11 percent since the last earnings report in October on concerns that iPhone sales may have suddenly dropped off,” Adam Satariano reports for Bloomberg. “Results due Tuesday will give investors a closer look at whether that slump was justified—or a long-awaited signal that the stock is poised for a rally.”

“The smartphone accounted for 66 percent of Apple’s revenue last year, up from 50 percent three years ago,” Satariano reports. “Given Apple’s dependence on the iPhone, any hint that sales might slow—especially in China—spooks investors.”

“According to several analysts, Apple has cut orders to its suppliers for phone components, indicating the Cupertino, California-based company may not sell as many handsets in early 2016 as originally anticipated,” Satariano reports. “The question for Apple stakeholders is whether the iPhone production drop is any different from years past. Apple’s sales always fall precipitously after the holiday shopping quarter as customers begin waiting for new products, which are typically released around September. That puts the focus squarely on Apple’s outlook for the first three months of 2016.”

Read more in the full article here.

MacDailyNews Take: Yup.

One thing is for sure: All eyes will be on Apple’s guidance for Q216.MacDailyNews, January 15, 2016

Apple to release Q116 earnings, webcast live conference call on January 26th – January 22, 2016


  1. some perspective:
    Apple’s non-iPhone business (Macs, iPads, services, other) in FY15 was 78.7 B$, more than the total of Analphabet. So much for Apple being overly dependent on the iPhone.

    1. Doesn’t matter. Greed=growth. Wall Street doesn’t believe Apple can grow any of its businesses like Alphabet can. All I ever hear about Alphabet is unlimited growth potential due to all their obscure, no-revenue projects. Potential is a big deal with Wall Street. I think investors get warm and fuzzy over the future. Apple doesn’t talk about future projects so there’s nothing to excite potential investors. Now that everyone wants to believe their iPhone business is dead, I have my doubts the stock will do very well this year even if Apple continues to sell a lot of iPhones. Apple doesn’t sell itself to Wall Street very well like Alphabet does. Apple will continue to get rich but except for dividends, that wealth won’t reach shareholders in terms of share gains.

      There are certainly enough articles about how Alphabet is going to kick Apple’s ass by stealing away Apple’s market cap position. Although it’s not really important to shareholders, it’s not a great help at all for investor confidence building. Alphabet is now seen as the big winner and Apple is seen as the big loser despite Apple having far more wealth.

      1. I think ad revenue would be far more susceptible to volatility than iPhone sales, but apparently Wall Street doesn’t think so. From a practical perspective, it would be far harder for me to ditch Apple and iOS than to drop Google services (which I have been doing progressively). Tens of millions of regular iPhone users will continue to upgrade unless Apple turns out to be a horrific privacy-rights abuser or alternative, superior hardware becomes dramatically less expensive and a concurrent OS easy to switch to. I can’t imagine this happening anytime soon.

  2. What amazes me is that there is so much consternation over a company that earns nearly a quarter of a trillion dollars in revenue each year and has a quarter of a trillion dollars of cash. The company is healthy and is growing. Wall Street analysts do a great disservice to investors.

  3. What I find amazing is how Wall St. totally discounts the fact that Apple is making more money than any company in the history of the world. Even if growth stagnates at this level, no other company has ever made this kind of money. It broke the all time record last holiday quarter and is likely to break it again or come close this holiday quarter. Yet the stock sells at a huge P/E DISCOUNT to the average S&P 500 stock. It’s crazy to say that a company making more money than any company in the world is below average. And this doesn’t take into account the incredible balance sheet, stock buy backs, and the dividend. Wall St. can’t see the forest for the trees.

    1. I understand your frustration, but Wall Streeters are generally focused on growth (PEG). They like the multiplier effect of increasing P/E on smaller companies for which they anticipate future growth in revenue and earnings. Income stocks are valued differently in terms of ROI.

      It all comes down to earnings per share performance and future expectations. Of course, big investors and analysts can and do manipulate public expectations in order to increase profits.

  4. The following statement in the article is ridiculous:

    “Apple’s sales always fall precipitously after the holiday shopping quarter as customers begin waiting for new products, which are typically released around September.”

    Sales for most items fall quite a bit after the holiday quarter because people spent a lot of cash (or credit), bought a lot of stuff, and are taking a break from the retail rat-race for a while.

    If the author thinks that people are actually going to wait seven or eight months to buy an iPhone because they did not get one over the holidays and feel the need to wait until the iPhone 7 is released, then he/she is an idiot. A few people may feel that way, but the rest bought an iPhone over the holidays when they saw a good deal.

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