Apple loses $1tn status after soft forecast
NEW YORK: Shares in Apple Inc fell 6 per cent on Friday, cutting its market value back to less than $1 trillion after it forecast softer-than-expected sales for the holiday quarter and fuelled nerves over iphone sales by saying it would no longer release the figures.
The dip in Apple’s shares to $208.50 knocked around $67 billion off its value, and put Amazon and Microsoft Corp back in the mix in the race among the United States’ big tech players to be the world’s most valuable company.
The Cupertino, Californiabased company blamed weakness in emerging markets and foreign exchange costs for a disappointing forecast for sales in the run-up to Christmas that are crucial to results for consumer electronics producers.
Most analysts were still upbeat on fourth-quarter results, and there was no obvious fallout for rest of the FAANG group of major US tech stocks. Shares in Facebook Inc, Amazon.com Inc, Netflix Inc and Google-owner Alphabet Inc all rose on a generally buoyant Wall Street.
Eight brokerages cut their price targets for Apple, but only one — Bank of America Merrill Lynch — cut its rating on the stock, to neutral from buy.
“Time for investors to adjust to the new disclosures,” analysts from the brokerage said. “Although the long term opportunity is significant, we expect near term pressure on shares.”
The move announced on Thursday to stop reporting unit sales data for iphones, ipad and Mac computer products was widely criticised, with some arguing it meant Apple expected sales of iphones have now peaked.
“While the company believes units are a less relevant metric, we strongly disagree — particularly since we believe iphone units will begin to decline y/y as a result of higher average selling prices,” analysts said.
The company, based in California, blamed weakness in emerging markets and foreign exchange costs for a disappointing forecast for sales in the run-up to Christmas