“AAC Technologies Holdings Inc , an acoustic components supplier to Apple Inc , on Thursday reported a drop of 28.7 percent to 973 million yuan ($140.38 million) in quarterly net profit, dented by lacklustre iPhone sales volume growth,” Reuters reports.
“AAC Technologies, which supplies acoustic and haptic components for Apple products such as the iPhone, said revenue in the July-September quarter dropped 8.5 percent to 4.87 billion yuan, compared with consensus estimate of 5.7 billion yuan,” Reuters reports. “The company, which is estimated by research and brokerage firm Sanford Bernstein to derive half of its revenue from Apple, saw its stock plunge 57 percent this year as trade war friction between China and the United States intensified.”
“Apple’s iPhone shipment unit in the September quarter remained almost flat from previous year at 46.9 million units,” Reuters reports. “An appreciation of the Chinese yuan and a weak product upgrade cycle resulted in a 4.2 percentage points decrease in gross profit margin for the first nine months of the year, AAC said.”
Read more in the full article here.
MacDailyNews Take: So, it actually wasn’t due to being “dented by lacklustre iPhone sales volume growth,” but, rather, as AAC stated, “appreciation of the Chinese yuan and a weak product upgrade cycle” that impacted their results. Talk about burying the lede. Fake news.
Also, what an absolute shocker that the July-September quarter would be weaker for a company which is dependent on iPhone for half its revenue! After all, nobody on earth knows that new iPhones are set to arrive the very next quarter, so there’s never any seasonal drop off in iPhone sales, especially in July, August and September.
Both Reuters and Bloomberg love to fabricate anti-Apple stories for some reason.
Although I’m not entirely happy with articles that accuse Apple of having a declining iPhone business, I refuse to actually get upset over those articles. If these articles help to drive Apple’s share price down then they’re beneficial for Apple to continue buying back shares at a cheaper price. I’m just not happy that Apple stock is so easy to manipulate by the big investors. This type of ridiculous manipulation isn’t happening to the FANG stocks and Microsoft. Then again, maybe it’s entirely Apple’s fault for being so dependent upon one product when it should be able to diversify where its revenues and profits come from.
Because I now own Apple for the dividends, none of these articles are doing me any harm. If the stock goes up or down in a week, it doesn’t change a thing for me. It only annoys me that stocks with much higher P/Es are stable but Apple with its relatively low P/E gets pushed all over the place. I’m comfortable owning Apple and I shouldn’t be concerned about daily happenings. I certainly have more important things to do in my life than worry about articles accusing Apple of causing other companies to lose revenue.
Apple should acquire a cloud business to possibly stabilize revenue and profits. Wall Street claims cloud businesses are so wonderful and have unlimited growth potential, so maybe that’s what Apple should acquire to keep greedy investors from worrying every quarter.
Apple does not have just
‘one product.”
It does appear as though Apple is buying back shares during this time period. There is definitely an outstanding share decrease from 4.83B to 4.75B since the earnings call. So even though Wall Street is punishing Apple (for weak guidance or non-transparency?), the company is doing what needs to be done by using this opportunity to buy back more shares. Good for Apple and good for Apple shareholders.
It’s going to be a bit harder for Apple to get back to that trillion-dollar valuation as the outstanding shares decrease but that’s not really important.