Published: Mon, November 05, 2018
Electronics | By Kelly Massey

General Business: Apple posts record revenue but its value slips under $1tn

General Business: Apple posts record revenue but its value slips under $1tn

The results were good, with Apple raking in record revenue - up 18 per cent quarter-on-quarter, and 20 per cent year-on-year.

The disclosure is weighing on Apple's stock despite strong fourth-quarter results that saw the company report record quarterly revenue and earnings per share.

In midday trade, Apple skidded 7.3 percent to $206.07, slipping below the $1 trillion milestone it topped in August to around $995 billion. The stock closed at $222.22 in NY, leaving it up 31 percent this year. Apple suppliers declined after the report. Analysts were looking for $92.7 billion, according to data compiled by Bloomberg.

In an interview with Reuters, CEO Tim Cook blamed this on weakness in emerging markets, foreign exchange costs, and uncertainty whether the iPhone maker can keep up with demand for new products.

Chief Financial Officer Luca Maestri said the company will stop reporting unit sales for iPhones, iPads, and Macs beginning in fiscal 2019. But the move also highlights the company's desire to become more of a services business. "Usually, if they sell a lot of something, you want to tell everybody", the Apple co-founder told the New York Times nine years ago when criticizing Amazon's Kindle.

Shares hit $209.20, down from $232 at the start of October, even after Cook reassured investors that Apple's popularity in China remained strong, in the face of a strong U.S. and China trade war. "It's going to take a few quarters for Apple to win investor confidence in this new way of analyzing the Apple story". This is up 20 per cent compared to the corresponding period from a year ago.

Apple revealed had it sold 46.9 million iPhones during the previous quarter. The average iPhone selling price was $793.

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Both, the declining/stagnating sales and increasing ASP of iPhone, has been attracting enough criticism for Apple, especially at the time when the growth of the global smartphone market is largely driven by developing markets, likes of India. It's also the central hub for connecting the other devices and using services. The nearly $10 billion revenue is another record figure for the category and is expected to increase more as Apple pours in more efforts in offerings such as digital content and payments. Analysts expected $10.18 billion. Apple suggested that users could restore the performance of their older iPhones by simply replacing the battery. The company is working on digital newspaper subscriptions and original video content for next year.

For the quarter ended in September, Apple brought in $62.9 billion in revenue, beating expectations of $61.5 billion respectively.

Mike Levin, co-founder of Consumer Intelligence Research Partners LLC, a market-research firm that surveys Apple customers, said the change shows Apple executives are thinking about their business in ways they haven't wanted to say aloud.

Sales in Greater China came in at $11.4 billion in the quarter, up 16 percent from a year earlier. Save for the iPad, all other categories rose, led by other products (31 per cent) and iPhones (29 per cent).

Apple's sales in its latest quarter and its estimates for the holiday season surprised experts.

The tech giant yesterday warned shareholders that festive sales could fall below expectations, even as it recorded double-digit growth for the fifth consecutive quarter. Apple launched new MacBook Pros in July.

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