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A Look at Apple’s Revised Outlook

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Updated

Revenue outlook lowered

Apple (AAPL) is expected to report its fiscal 2019 first-quarter earnings on January 29. On January 2, Apple announced a revision of its performance outlook for the holiday quarter, in which it cut its revenue estimate to ~$84 billion from its November outlook of $89 billion–$93 billion. Apple cut its outlook because of weak demand for its iPhone, which generates most of its revenue.

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Other items mostly unchanged

Apple’s outlook for other items was mostly unchanged:

  • It now expects a gross margin of 38%, versus its previous outlook of 38%–38.5%.
  • It now expects operating expenses of $8.7 billion, not far off from its original $8.7 billion–$8.8 billion estimate.
  • It now expects other income and expenses of $550 million, up from $300 million.

Apple’s EPS in December 2017

Apple reported EPS of $3.89 in the December quarter of 2017. Although the company has not provided an EPS estimate for the December quarter of 2018, Wall Street expects its EPS to be $4.19. In the September quarter, Apple’s EPS were $2.91, while Alphabet’s (GOOGL) were $13.06, Amazon’s (AMZN) were $5.75, Facebook’s (FB) were $1.76, and Microsoft’s (MSFT) were $1.14.

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