Apple

Apple

12 February 2019Reading time: 3 minutes

The new year didn’t start off very well for Apple. The American tech giant lowered its revenue outlook in January for the first quarter of the broken fiscal year 2019, which ended on December 29th 2018. The turnover estimate was lowered from 89-93 billion dollar to approximately 84 billion dollar.

Eventually the first quarter revenue of Apple reached 84,3 billion dollar, which the presentation of the first quarter results on January 29th showed. On an annual basis this is a revenue decline of 5 percent. This decline was especially due to the disappointing iPhone sales, from which the revenue declined on an annual basis with 15 percent. Analysts claim that the high retail prices of the recently launched new iPhones models might have caused the recoil in sales. However, the revenue of other products and services did increase over the same period with 19%.

The earnings per share of Apple eventually improved over the past quarter with 7,5 percent on an annual basis, towards a new record of 4,18 dollar. Furthermore the company has declared to pay out a cash dividend of 0,73 dollar per share. For the second quarter of the broken fiscal year 2019, Apple expects an estimated revenue of 55-59 billion dollar.

For a longer time, Apple is shifting their focus from hardware to software. In recent years Apple introduced, among other things, Apple Music, Apple Pay and Apple Cloud. With these services Apple achieved a total revenue of 10,9 billion dollar in the past quarter. One of the people who played a pioneering role in the transformation was Senior Vice President Angela Ahrendts. Over the past five years she was responsible for the renewal of the online and offline Apple Store.

Ahrendts announced her departure early February and will be followed up by Deidre O’Brien. She is been working at Apple since 1988 and is currently Vice President Human Resources. For now O’Brien will combine these two positions.

It remains to be seen if Apple will find someone else to fulfil the position left by Ahrendts and how the strategy for the next period will develop. Especially now the income from the online Apple store is under pressure. In the past period, Netflix and Spotify have stopped offering subscriptions via Apple's App Store. At the same time Apple temporary disconnected Google and Facebook apps, due to possible privacy violations. It remains to be seen if these events will have a negative effect on the App Store revenue.

As an result of the revenue warning, the stock price of Apple plummeted early this year with more than 8 percent in a short time. During recent weeks the stock price recovered again , due to the presentation of the first quarter results and the outlook for the second quarter of the fiscal year 2019. The stock price is now (February 6th 2019) 174,24 dollar, which is more than 10 percent higher compared to the start of this year. In comparison to a year ago the stock price has risen more than 9 percent but this is still far below the 233,47 dollar level from October 3th 2018.

The future price of the stock is subject to several political, industrial and sector specific as well as economic factors. Investors should consider these risks when making their investment decisions. Developments can be different at any time than investors anticipated on, which could result in capital losses.

Vontobel products on Apple are tradable at DEGIRO.

Important legal information:

This information does not constitute a financial analysis, but product advertisement. Thus it does not meet the legal requirements to ensure the impartiality of financial analysis and is not subject to trade prohibition before the publication of a financial analysis.

Fordetailed information, particularly regarding the structure and the risks associated with an investment in the derivative financial instruments, prospective investors should read the Base Prospectus, which is available together with the Final Terms and any supplement to the Base Prospectus in electronic form on the issuer’s website: http://beursproducten.vontobel.com. Additionally, the Base Prospectus, anysupplements to the Base Prospectus and the Final Terms are available inprinted form, free of charge, at the registered office of the issuer: Vontobel Europe AG, Bockenheimer Landstrasse 24, 60323
Frankfurt am Main, Germany.


Investors should consider the applicable selling restrictions.
Companies of the Vontobel group may directly or indirectly pay commissions in varying amounts to third parties (e.g. brokers) in connection with the public offer and the distribution of the derivative financial instruments. Further information is available upon request from your distribution partner.

 

24/10/2020 22:01:21