Apple: Cautious Guidance Is an Ominous Sign for Stock Market

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Stocks Analysis by Shane Neagle covering: Caterpillar Inc, Apple Inc, Caterpillar Incorporated, Caterpillar Inc DRC. Read Shane Neagle's latest article on Investing.com

The earnings report is also unlikely to calm down fears about iPhone 15 demand and China headwinds, although the services sales continue to shinerevenue and profit for the fourth quarter that topped the average analyst estimate. However, the company issued a soft revenue forecast for the holiday quarter, which sent shares lower in early New York trading on Friday.

The product's revenue fell more than 5% to $67.18 billion, also falling below analyst expectations. The bulk of the product's revenue comes from iPhone sales, which amounted to $43.81 billion in FQ4, up 2.8% annually and in line with expectations. Apple generated a further $9.32 billion in sales of wearables, although this number was also a bit lower than what analysts were looking for. Finally, Services revenue rose 16% to $22.31 billion, topping the consensus by nearly $1 billion.

Apple stock recently fell after reports emerged that China's government reportedly expanded its ban of iPhones to local government workers and state-owned companies. Moreover, Huawei launched a high-end smartphone that is directly challenging Apple’s iPhone 15. Apple said it returned almost $25 billion to shareholders, while it still managed to continue “to invest in our long-term growth plans,” Maestri noted.

Maestri said he expects revenue in this quarter, which covers the busy holiday period, should be “similar” to last year. For its December quarter last year, Apple generated $117.2 billion in FQ1 revenue. Analysts were hoping for revenue acceleration to $122.8 billion, according to data compiled by Bloomberg.

 

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