There was a lot to be enthusiastic about from yesterday’s Apple earnings, but some investors are rattled by weaker-than-expected iPhone sales.
As a result, Apple’s valuation dipped below the $1 trillion mark for the first time since the company hit that milestone earlier this year. The slide could well continue in the early part of today.
One analyst — Bank of America Merrill Lynch’s Wamsi Mohan — wrote that, “we are incrementally concerned that not all the weakness is captured in the near-term and we are likely to see further negative estimate revisions.”
A big part of the decline may relate to Apple no longer report the unit sales of the iPhone. Instead, it will reveal the average sale price of the handsets. Analyst Daniel Ives of Wedbush Securities described this as a “jaw dropper.” In a note on Friday, Ives wrote that: “The Street will find this a tough pill to swallow this morning as the transparency of the Cupertino story takes a major dent given that tracking iPhone units has become habitual to any investor that has closely followed the Apple story for the last decade or more and is critical to the thesis.”
Apple’s earnings caused the firm’s shares to decline by as much as 7 percent late yesterday. This took roughly $75 billion off the company’s market cap, and knocked it below the $1 trillion mark. At the close of trading, Apple was valued at around $1.073 trillion. At time of writing, Apple is trading at $208 a share, having opened down 6 percent.