It’s hard to remember a quarter in last many years when Apple Inc. (NASDAQ:AAPL) failed to deliver up to investors’ expectations, but market conditions are not favorable anymore.
As per the reports, it generated $75.87 billion revenues in December quarter vs. the guideline of $75.5-$77.5 billion. The one thing that attracts the attention of many market experts is the patent infringement payment of $548 million received by the smartphone maker in December quarter.
If this payment is kept aside, the revenue for the December quarter narrows down to $75.32 billion, 1% higher than the revenue reported during the same quarter last year (vs. 1.4% guideline). Nobody can say how customers and investors would have reacted if Apple had failed to realize this payment of $548 million.
The Other Way Round
Ever since Apple started giving revenue numerical vs. directional guidelines in 2002, it has never missed the numbers even once. Experts claim that the company was confident of receiving the patent infringement fees in December quarter. So there are not many who believe that it would have lowered the revenue guideline by $500 million, lest this payment wasn’t available for realization.
What If The Guideline Was Missed
Many fund managers can be read quoting that the market performance of Apple would have turned worse if the guideline was missed; however, it may not be the case. Even before Apple announced the results, the stock value had gone down 19% from its November price. Post the announcement, the price further plunged by $6, which was not unexpected. Even if the company had missed the guideline of $75.5 billion, there are very limited chances of this price going down further.
Apple’s challenges don’t seem to end amid slashing iPhone 6S sales. It has kept $50-$53 billion revenue guideline for the March 2016 quarter, 32% lower than December 2015 quarter. Going forward, it may choose to remain conservative and figure out ways to justify its market leader’s image.