Apple stock price dropping despite upbeat earnings release

Apple stock price dropping despite upbeat earnings release

Apple (AAPL.US on xStation) reported its financial results for its fiscal 2016 fourth quarter ended in September after the closing bell on Wall Street. In spite of EPS beating expectations, revenue in line with estimates and raised guidance for the next quarter, the company’ shares slid in the after-hours trade.

 In after-hours trade, Apple’s shares were down about 2.8%. However, immediately after the release shares had risen as much as 3%. The key points of the report:

  • Earnings per share: 1.67 USD (1.65 USDexpected)
  • Revenue: 46.9bn USD (46.9bn USD expected)
  • iPhone units sold: 45.51mm (45mm expected)
  • Q1 revenue guidance: 76-78bn USD(75.3bn USD expected)

  • Q1 gross margin: 38%-38.5% (38.9% expected)

The numbers for the past quarter were fairly good. Moreover, the guidance for the next quarter was raised although the market could expect slightly higher revision. The key point is a higher number of sold iPhones.

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 Apple’s revenue breakdown by product, source: Zacks Investment Research

Nevertheless, there were a few disappointments. The biggest one was Apple’s results in China — which were a major market focus over the last year. The revenue in Greater China hit 8.8bn USD in the past quarter, down 30% from the same quarter last year and down 1% from the third quarter.

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 Source: Jackdaw Research

 Apple shares have recently rebounded due to a release of new iPhone 7 and problems of Samsung.

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