Apple Down Despite Earnings Beat

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Shares in US tech giant Apple are trading a little lower pre-market on Tuesday. Shares in Apple have been trading lower over recent weeks following an initial rally in October which saw price trade highs of over 124.

Q4 Results Beat Estimates

At the end of last week, Apple reported earnings for its 4th fiscal quarter of 2020. Earnings per share came in a little better than expected at $0.73 versus estimates of $0.70. Revenues were also marginally higher $64.7 billion, exceeding forecasts for a $63.70 billion result.

Year on year, revenues saw a 1% increase. However, within the results there were some red flags, highlighting weakness within the company’s performance.

iPhone revenues were lower than expected at $26.44 billion versus estimates of a $27.93 result. Year on year, this result marks a more than 20% drop in iPhone revenues.

iPhone Revenues The Only Weak Spot

On the whole, however, Apple’s performance was strong. Mac revenues posting $9.0 billion over the quarter, beating estimates of a $7.93 reading and marking a 28% year on year increase.

Ipad revenues were also higher, rising 46% year on year to $6.8 billion, beating estimates of a $6.12 billion figure.

The other products category also saw a strong rise with revenues of $7.88 billion, beating estimates for a $7.40 billion result and marking a 20.7% increase year on year.

Cook Optimistic Over iPhone 12

Apple investors have been somewhat frustrated with the lack of guidance offered recently. Apple CEO Tim Cook has refrained from offering guidance over the last two quarters as a result of the uncertainty linked to the COVID pandemic.

Cook once again refrained from offering any guidance for 2021 saying:

“If you look at the case count, the case counts are climbing in Western Europe. They’re climbing in the United States. And so there’s still a sufficient level of uncertainty out there… we don’t believe that’s an environment to guide into.”

However, Cook did note his optimism over the sales of the group’s recently launched iPhone 12, which went on sale in October, saying that “initial data points are really quite good”.

Cook cited 5G support, carrier promotions, and a loyal install base as his reasons for being optimistic over the sales of the new product.

Cook ended by hinting at further product launches to be announced soon, saying:

“Without giving away too much, I can tell you that this year has a few more exciting things in store.”

Apple Breaks Below Rising Channel

apple shares

Shares in Apple are now down over 21% from the all-time highs posted earlier in the year. With price having broken below the rising channel low on the most recent decline, there is a risk now that the October high could prove to be a lower high against the 137 highs posted in the summer. This suggests the potential for a bigger reversal.

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