Apple Shares Drop in After-hours Trading

November 2, 2018
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Apple presented its quarterly results to investors on Thursday, beating most expectations. However, December forecasts have been toned down somewhat, leaving investors uncertain about the stock. After-hours trading was down -6.5% from the previous close, and if this figure holds true after Friday trading, then the NASDAQ could take a significant hit.

Here’s What Investors Need to Know About the Apple Earnings Report

Apple had some great figures for investors during its quarterly call. Earnings per share were reported at $2.91, a strong increase over the $2.78 that analysts expected. The company generated $62.9 billion in revenue during the quarter, which reconfirms Apple’s status as one of the strongest revenue earners on the stock market. iPhone sales were better than expected, delivering $37.2 billion, a significant increase over the $35.6 billion that was expected.

Apple also reported that its China sales had grown significantly in the quarter. $11.4 billion was generated throughout China (including Macau, Hong Kong, and Taiwan). This is a strong improvement over the $9.8 billion that was generated in the same quarter last year. China is the most important growth market for Apple. High brand appeal and a growing Chinese middle class is helping the company to flourish in the region.

Holiday Quarter Forecast Leaves Investors Deflated

Despite all the good news in the earnings call, it was the projection for the next quarter that triggered stock selloffs in after-hours trading. The Cupertino based company is projecting $89 billion in total revenue for the last quarter of the year, whereas analysts were expecting almost $93 billion.

Apple is also failing to grow its services division at the expected rate. Revenue from the App Store and Apple Music was $9.98 billion, whereas analysts expected $10.2 billion.

Stock still has the potential to recover during Friday trading, and some investors may take this opportunity to buy shares at a lower price. However, if the price is still down when the markets close on Friday, then it could put a significant dent in the NASDAQ Composite.

Apple is still up 31.31% for the year, and 6.84% for the last three months. It remains a popular growth stock that top analysts frequently recommend with a BUY rating.

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