'Houdini-like metrics move': Here's what Wall Street is saying about Apple's decision not to reveal its iPhone sales (AAPL)

tim cook

Apple on Thursday reported underwhelming iPhone sales and gave soft guidance for its crucial holiday quarter.

The tech giant said it sold 46.9 million iPhones, which was up 0.4% versus a year ago but shy of the 48.4 million that Wall Street analysts surveyed by Bloomberg were expecting. Apple also said it would no longer reveal unit sales for its hardware.

Apple said it expected to generate revenue of $89 billion to $93 billion during the holiday quarter, a number on the low end of the $92.74 billion that analysts were hoping for.

The company reported earnings of $2.91 a share, easily beating the $2.78 that analysts surveyed by Bloomberg were expecting. Revenue rose 19.6% year-over-year to $62.9 billion, outpacing the $61.44 billion that was anticipated.

Shares plunged more than 7% in after-hours trading to $206.30 apiece. Any print below $207.45 during Friday’s session would cost Apple its $1 trillion valuation.

While Wall Street analysts were disappointed about Apple’s decision to withhold unit sales for hardware, they remained mostly bullish on the tech giant.

Here is what Wall Street analysts are saying about the quarter:

Jefferies — ‚We believe AAPL intends to tell a compelling Services story‘

Price target: $265 

Rating: Buy

„AAPL will stop disclosing unit sales figures next qtr, fueling fears the company has something to hide,“ the Jefferies analyst Timothy O’Shea said in a note.

„But AAPL will disclose Services gross margin for the first time ever, a potential catalyst for the stock. We believe AAPL intends to tell a compelling Services story, which we believe has 2x higher gross margin than hardware and improving.“

Morgan Stanley — „Noise near-term“

Price target: $226

Rating: Overweight

„Downtick on emerging market trends & disclosure changes create noise near-term but better ASPs & sustained Services growth support our view of Apple monetizing a loyal & increasingly engaged user base,“ Morgan Stanley analyst Katy Huberty wrote.

„Apple provided a wider guidance range ($4B) than normal ($2B) to reflect greater demand uncertainty given the higher number of new product launches and greater macro uncertainty in the economy relative to 12 months ago with mid-point implying +45% Q/Q versus normal seasonality of 63%.

She added: „Apple announced that it will make a number of disclosure changes next quarter including not disclosing units by segment. The reality is that as the smartphone market matures, users are paying up for higher quality devices that last longer making units less of an indicator of trends than revenue.“

RBC Capital Markets — ‚The bull thesis is more diluted‘

Price target: $240 (from $250)

Rating: Outperform

„AAPL reported modest upside to Sept-qtr results with no notable slowdown from China as better iPhone ASP’s and stable GM’s enabled revenue and EPS upside vs. expectations,“ RBC’s Amit Daryanani said.

„The disappointment from this print will be A) their decision to stop providing iPhone units/ASP information going forward and B) Dec-qtr gross-margin guide was underwhelming vs. expectations given memory tailwinds.“

Daryanani added: „We are sticking with our OP rating, but concede the bull thesis is more diluted given risk that AAPL’s desire to stop providing iPhone unit disclosures is an attempt to hide unit declines going forward (will take a while to prove/disprove this).“

See the rest of the story at Business Insider
Source: Business insider

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