Apple's revenue during the first quarter of the 2019 fiscal year will be lower than the one presented in the 2018 fourth quarter results press release, with the new estimation going down to approximately $84 billion from a figure of between $89 billion and $93 billion presented in November 2018.
According to Tim Cook's letter to Apple's investors from January 2, 2019:
Today we are revising our guidance for Apple’s fiscal 2019 first quarter, which ended on December 29. We now expect the following:
- Revenue of approximately $84 billion
- Gross margin of approximately 38 percent
- Operating expenses of approximately $8.7 billion
- Other income/(expense) of approximately $550 million
- Tax rate of approximately 16.5 percent before discrete items
All other Apple product categories saw growth
When compared to the estimates provided by Apple to its investors in November, the revenue amount took a drastic nosedive, while the "other income/(expense)" category went through the roof, reaching approximately $550 million from an initial estimate of $300 million.
Although all other figures remained unchanged in Apple's fiscal 2019 first quarter estimation, any investor worth its salt knows that the revenue is the one that will break or make a good fiscal year for any company.
"Lower than anticipated iPhone revenue, primarily in Greater China, accounts for all of our revenue shortfall to our guidance and for much more than our entire year-over-year revenue decline. In fact, categories outside of iPhone (Services, Mac, iPad, Wearables/Home/Accessories) combined to grow almost 19 percent year-over-year," also stated Cook.
Apple plans to become net-cash neutral over time
Apple's CEO went on saying that consumers adapting to a market where carrier subsidies are scarce, the price increases due to US dollar strength fluctuations, and some of its customers postponing an iPhone upgrade by replacing the battery in their old model are also behind the shrinking of the iPhone revenue.
Apple also expects to have $130 billion in cash after the quarter ends and it's planning to become net-cash neutral in the future, which means the it will strive to have an even amount of cash coming in and cash going out.
Despite all assurances from its CEO that the company will overcome the shrinking iPhone revenue it witnessed lately because of economic deceleration in emerging markets, Apple really needs to make some changes in its business strategy given that the iPhone provides Cupertino with the largest share of its revenue.
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