Gene Munster: Wall Street has not fully factored in the repercussions of Apple’s earnings miss into FY19 estimates

Apple’s “Dec-18 quarter is significant for two reasons: First, this call is the initial forum for Apple to address the revenue miss that they pre-announced on January 2nd,” Gene Munster and Will Thompson write for Loup Ventures. “Second, the quarter will be Apple’s first under its new reporting methodology, which excludes unit sales for individual products and includes revenue and margin breakout for Services and Products separately.”

“We think the Street has not fully factored in the repercussions of the miss into FY19 estimates. We are expecting FY19 total revenue to be down about 5% y/y. Consensus currently calls for a 2% y/y decline,” Munster and Thompson write. “We now anticipate iPhone units to be down 17% in FY19 compared to flat in FY18.”

“China hit a wall – we estimate greater China (accounts for 20% of revenue) was down 36% y/y compared to up 16% y/y in Sep-18. Upgrades were delayed due to the 23% weighted average iPhone price increase in the fall along with a more generous battery replacement program,” Munster and Thompson write. “Despite these headwinds, Apple will report a record quarter for EPS. This gets lost in negative headlines, but the company will report revenue down 5% y/y and earnings down only 1% (EPS up 7% due to decreased share count). This is unprecedented and representative of a resilient business.”

Read more in the full article here.

MacDailyNews Take: Apple reports Q119 earnings (and the all-important Q219 guidance) on Tuesday, January 29, 2019 after the closing bell, right around 4:30pm ET and, following that, holds what promises to be a very interesting conference call with analysts starting at 5pm Eastern. We’ll cover it all right here on these pages, as usual.

11 Comments

  1. If the news is bad, this stock is heading for $125.

    So if you don’t like sudden roller coaster dives, jump off this ride now.

    At this point, the only thing that will reverse this dive is if Apple announces that Cook is being replaced.

  2. Dude – Cook is not the problem and It really pisses me off when people try to put any blame on him – Apple is still doing what it always did – put the Mac last.. There is no other person I would rather run Apple.. Replace him and their will be product shortages and people will have to buy other brands than Apple..

    1. @whatever

      NEWS FLASH, dumbass, there have been product shortages ever since Cook took over and he’s the one chasing people away to other brands.

      Cook is at war with Apple consumers. He has been robbing us blind for almost a decade.

    2. whatever: you are wrong. Cook puts the Mac last. No other leader at Apple has been so stupid in the last 35 years of Mac existence.

      Nothing Timmy has pushed since he arrived has as much profit potential as the Mac still has – and that includes the iPhone. The problem is that his predecessor lost the Mac vs PC war and Cook has decided he doesn’t want to fight. Quite the opposite, Apple relies on Microsoft for all kinds of stuff. Apple rents Azure services and so forth.

      Why would you defend Cook? What has he done to ensure that Apple stays ahead of the competition for the long term? Answer: he hasn’t. He cashed in on the momentum from Jobs’ app store and hasn’t had an original idea since.

      The CEO, who is by far the most informed, powerful, and overcompensated person in any company, has the sold duty to manage the business for the long term good of the company, its investors, its employees, and the communities that are directly and indirectly impacted. Timmy has shown no interest in doing that. All Apple products released under his watch have shown lack of attention to detail, often outrageous pricing, missed delivery dates, glaring features omissions, and ecologically stupid unrepairable design.

      It Timmy can’t be held responsible, then he needs to return all his outrageous bonuses for the last 7 years.

      Oh yeah – and fire dead wood like Ahrendts, another costly Cook mistake. Apple needs to rediscover its origins as a PERSONAL computer maker and stop trying to be a subscription pusher fashion house (with an uninspired absentee designer).

      1. Everything you write indicates that you must be an old rusty chump. Stuck in the old, unable to adapt. Yet guarding it all through deluded rant!
        Get a life. Get with the program.
        Times change!

  3. I’m tempted to put some of my cash into AAPL. You know the old adage about investing when everyone else is running scared. Good opportunity for quick gains. Only question is whether to buy now or after the earnings announcement.

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