Apple slides as Christmas sales forecast falters

Californian tech giant Apple said its sales over the festive period could slip below consensus expectations, despite achieving its fifth consecutive quarter of double-digit revenue growth and its best September quarter to date.

The company’s outlook on revenue for the rest of the year, which gives an indication on how well its latest products are selling, was set at between $89bn (£68.4bn) and $93bn. Analyst estimates as collated by S&P Global Market Intelligence had expected revenue of $92.8bn.

The revelation left investors spooked, particularly in light of e-commerce giant Amazon predicting a similar outcome for its Christmas sales. Apple’s share price fell over seven per cent in after-hours trading, taking it briefly below $1 trillion in market value.

Chief executive Tim Cook said the unseasonably low predictions were the result of foreign exchange rates, weakness in emerging markets and a fear that Apple would not be able to produce enough of its new products to sufficiently meet demand.

He stressed, however, that its performance in China was excelling, after concerns surrounding the US-China trade war impacted its share price in recent weeks.

Reporting its earnings for the three months to September tonight, which includes ten days of iPhone XS and XS Max sales, revenue rose 20 per cent year-on-year to $62.9bn, slightly beating analysts’ estimates.

It also smashed expectations on profits, with earnings per share increasing 41 per cent at $2.91 compared to the same period in 2017. Consensus estimates had forecasted a rise of just 25 per cent to $2.78.

Revenue from services, which includes iCloud, Apple Music and the App Store, reached $10bn as expected.

Investing.com analyst Haris Anwar told City A.M. the results raised “a red flag about the company’s ability to drive growth through higher prices”.