Apple Stock Declines As Investors Lose Confidence (AAPL)

Apple Stock Declines As Investors Lose Confidence (AAPL)
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Apple stock declined in the after-hours trading as traders lost enthusiasm when the company announced below expected guidance for the March quarter and record breaking, but below-consensus iPhone sales. Apple stock declined to as low as $507.00, a fall of $43.50 after the company announced its earnings report in the after-hour session.

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Weak guidance pulled Apple stock down

“The real problem is the revenue guidance,” JMP Securities analyst Alex Gauna told Market Watch. “The mid-point of the guidance has them back to a no-growth story. People were hoping for more, and they essentially guided flat year-over-year growth.”

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Apple Inc. (NASDAQ:AAPL) has started selling iPhone on China Mobile Ltd. (NYSE:CHL), which is the world’s largest network. In Japan, DoCoMo started selling iPhones on its network, which is another high-end deal for Apple. Despite such big partnerships, the iPhone maker has released flat revenue growth, which is not in line with investor’s expectations.

The iPhone sales came in at 51 million units, which is a record sale but below the analysts’ expected number of 55 million to 56 million units. Investors are disappointed by these numbers, which in turn is reflecting in the stock.

According to Mike Walkley of Canaccord Genuity, the quarterly numbers were below expectations and the seasonality is off despite the deal with China Mobile. However, the gross margin was strong, the analyst told Market Watch.

Factors that affected the sales

Sales in the Asia-Pacific region also declined 9%, and profits came down due to currency fluctuations, especially with the Japanese yen. In America, too, the sales were depressing.  One of the Apple Inc. (NASDAQ:AAPL) executives cited the delay in supply chain of the iPhone 5S as the major reason for the decline in sales number compared to the readily-available iPhone 5C, which did not see as much demand as the high-end iPhone 5S.

The Cupertino-based company said that sales were affected due to modifications made by some of the network carriers in the region and consumers showed less interest in upgrading to the latest iPhones.

There is no clarity yet over the opening price of Apple stock on Tuesday, but it is expected that it would not be as low as after-hours low. Investors are not upbeat on Apple stock though the company posted record earnings per share for the quarter.

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Aman is MBA (Finance) with an experience on both Marketing and Finance side. He has worked as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, reviewing tech gadgets, playing PC games and cricket. - Email him at
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