First it was Twitter, now it is consumer tech titan AAPL's turn to tumble. For those pressed for time, here is the breakdown:
- APPLE Q2 REVENUE $51.56BN, EST 251.97BN
- APPLE Q2 EPS $1.90, EST $2.00
- APPLE SEES 3Q REV. $41B-$43B, EST. $47.4B
- APPLE SOLD 51.2M IPHONES IN 2Q, EST. 50.7M
- APPLE SOLD 4.03M MACS IN 2Q, EST. 4.6M
- APPLE SOLD 10.3M IPADS IN 2Q, EST. 9.4M
- APPLE 2Q IPHONE ASP $641.83, EST. $651
- APPLE BOOSTS QTR DIV TO 57C-SHR FROM 52C, EST. 57C
- APPLE INCREASED SHARE REPURCHASE AUTHORIZATION TO $175B
And now the details:
Moments ago AAPL reported Q2 EPS of $1.90, missing expectations of $2.00 on revenue of $50.56BN which not only plunged by 13% from ayear ago, but also significantly missed expectations of $52 Billion. Perhaps the biggest driver for this was both the sequential and annual plunge in Chinese sales, which dropped to $12.5 billion from $16.8 billion a year ago.
And while Apple beat expectations on iPhone sales, selling 51.2 million units in the quarter, above the 50.7 million expected, if still 16% lower than a year ago, it did so on both a lower than expected margin of 39.4%, and lower iPhone ASPs, which dropped to $641.8 below the $651 estimate.
Worse, the company's guidance for Q3 revenues was absolutely abysmal, and now sees only $41-$43BN in Q3 sales, well below not only the median estimate of $47.35bn but below the lowest sellside estimate of $43.95bn.
But the scariest chart is probably the one showing the sharp slow down in sales across virtually all geographies.
For those curious about AAPL's crash, the gross cash rose once again to a new record high…
… but net cash after deducting AAPL's rapidly rising debt shows that it is virtually unchanged for 3 years:
According to Tim Cook, "our team executed extremely well in the face of strong macroeconomic headwinds. We are very happy with the continued strong growth in revenue from Services, thanks to the incredible strength of the Apple ecosystem and our growing base of over one billion active devices.”
Shareholders do not appear to share his pleasure because more troubling was the CFO commentary according to whom what was slowing iPhone sales was the slowness to upgrade.
So is the AAPL magic gone?
As of this moment investors says yes, as AAPL tumbles 6% after hours, and that despite AAPL announcing that the Board has increased its share repurchase authorization to $175 billion from the $140 billion level announced last year.It also added that it will continue to access domestic and international debt markets to fund shareholder returns, adding that it has authorized boost of $50b to holder return plan to a total of $250b by end of March 2018.
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