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By Jason Abbruzzese and Reuters
Apple shares dropped more than 6 percent in after-hours trading on Thursday after projecting holiday-season sales that were weaker than analysts expected and issuing a surprise announcement — that the company would no longer break out how many iPhones it sold each quarter.
Meanwhile, the company reported fiscal fourth-quarter sales of $62.9 billion, a new record for the company.
“We’re thrilled to report another record-breaking quarter that caps a tremendous fiscal 2018, the year in which we shipped our 2 billionth iOS device, celebrated the 10th anniversary of the App Store and achieved the strongest revenue and earnings in Apple’s history,” Tim Cook, Apple’s chief executive officer, said in a press release accompanying the earnings report.
The company surprised analysts and journalists by announcing that it would not detail unit sales of particular products such as iPhones in future reports.
“Apple analyst job just got a whole lot harder with these disclosure changes,” tweeted Neil Cybart, a veteran Apple watcher. “But that’s OK. I’m ready. Good earnings models (and perspective) will be able to handle the changes.”
Gene Munster, managing partner of Loup Ventures and a longtime Apple analyst, told CNBC he hoped the opposite would happen and that Apple would start issuing reports that detailed sales of the Apple Watch.
“This is going to be a process for investors to get more confidence that this in fact is a stable business,” Munster said about the change while noting that Apple was still doing “exceptionally well.”
Heightened expectations for Apple sales center on new iPhones that the company announced in September, which include a variety of pricer options including an iPhone that retails for $1,449.
Apple said it expected sales in the final three months of the year to be between $89 billion and $93 billion, which is on the low end of what analysts had expected, according to Bloomberg.
Apple has enjoyed a strong 2018. In August, it became the first public U.S. company to reach a valuation of $1 trillion.
In an interview with Reuters, Cook said some of the forecast was explained by Apple releasing its top-end iPhone models, the XS and XS Max, in the fiscal fourth quarter. Cook also said foreign exchange rates would have a $2 billion negative impact on Apple’s sales forecast.
Apple was unsure whether it could make enough new iPhones, Apple Watches, iPads and Mac models it released in recent weeks, Cook told Reuters. The company is widely expanding the use of its facial recognition unlocking system in iPhones and iPads, which uses special lasers that are still produced by only a handful of suppliers.
Cook said that Apple is “seeing some macroeconomic weakness in some of the emerging markets,” without specifying which ones.
But Cook stressed that Apple was happy with its performance in China, where revenue grew 16 percent to $11.4 billion, the fifth quarter in a row the company has had double-digit growth in the region.