Equity futures are getting hammered tonight after Apple Makes Rare Cut to Sales Guidance.
Apple Inc. lowered its sales forecast for its fiscal first quarter, a rare revision to its guidance, blaming slowing sales of smartphones and other devices in China.
Apple Chief Executive Tim Cook said in a letter to investors on Wednesday that the company now predicts revenue of around $84 billion for the quarter ended Dec. 29. Previously the company said revenue would be between $89 billion and $93 billion for the quarter. Analysts surveyed by FactSet forecast more than $91 billion.
“Most of our revenue shortfall to our guidance, and over 100% of our year-over-year worldwide revenue decline, occurred in Greater China across iPhone, Mac and iPad,” Mr. Cook wrote.
“As the climate of mounting uncertainty weighed on financial markets, the effects appeared to reach consumers as well, with traffic to our retail stores and our channel partners in China declining as the quarter progressed,” he wrote in the letter.
Uncertainty - What a Joke
Blaming uncertainty is a joke. No one can ever be sure of economic forecasts.
Facts of the Matter
- Apple sells a commodity.
- The competition has phones that are just as good, if not better, for cheaper
- At some point, consumers will no longer pay for a name.
- At some point, consumers decided new features are not worth the price.
The only surprise is how long it took to get to points 3 and 4.
5G won't be a savior. Apple could easily fall in half from here.
Expect all kinds of unexpected negative surprises in 2019.
Mike "Mish" Shedlock