Apple is staring down another quarter of underwhelming-at-best revenue
Revenue has declined for four consecutive quarters, the worst run since 2001. One more would make it the worst period since at least 1998, according to FactSet. The last time Apple updated investors, the company warned that revenue would be flat in the October-December quarter, saying iPad and wearables sales (i.e. the Apple Watch) would drop significantly. Still, analysts are expecting a modest revenue increase of 1% year-over-year in what is always Apple’s biggest quarter thanks to the introduction of a new iPhone model and holiday sales. Standing in its way is the continued uncertainty about sales in China. In January, Apple reduced the prices of several products in the country. Bloomberg Intelligence analysts felt this “reaffirmed expectations of a slowdown in the region.”
As the market prepares for Apple Inc’s earnings on Thursday, all I can think is this: CEO Tim Cook has problems. Plenty of them.
The company dropped out of the US$3 trillion valuation club this week, leaving Microsoft Corp to stand alone, thanks to worries over China sales and a multitude of other headaches for the Cupertino-based company. There are at least half a dozen challenges that analysts and investors will most likely ask Cook to address.
