Date: 30 Jan 2019

Apple’s share price climbed over five per cent in after-hours trading on Tuesday, after the tech giant marginally beat Wall Street expectations in its much anticipated quarterly earnings report. Apple Inc reported earnings-per-share of $4.18, beating initial estimates of $4.17. Apple’s revenue for the first fiscal quarter came in at $84.3 billion, beating forecasts of $83.97 billion.

Analysts pointed out that Apple had reported the numbers for its fiscal first quarter under a new structure, offering gross margin figures for its services and products segments, while withholding unit sales numbers for its most popular products, such as the phones and laptops.

Despite the beat on earnings and revenues, Apple lowered its projected second-quarter revenue, forecasting a number of between $55 to $59 billion, which was much lower than the $64 billion than most analysts had been looking expecting.

The report also showed weakening demand for Apple products amongst Chinese consumers, as sales in China slumped nearly twenty-seven per cent during the first quarter. The slide in China sales showed in first quarter iPhone sales, as iPhone revenue came in at $51.98 billion, which was lower than the $52.67 billion forecasted.

CEO Tim Cook addressed the slump in iPhones sales after Apple Inc’s released its first fiscal quarter results, he noted that customers are now holding onto older iPhone models for longer, due to an ongoing slow down in emerging market economies.

The head of Apple also said that the services segment of the company continue to post impressive growth, with revenue’s from services segment products such as Apple Music and iCloud storage topping $10.9 billion, marking a nineteen per cent year-over-year increase.

Apple’s Wearables and Accessories products also saw high growth rates, as they increased thirty-three per cent in just one year, making it the fastest-growing revenue segment for the tech giant during the first quarter.

 

Apple Inc Daily Candlestick Chart               Source- Activtrader Platform

 

Apple’s share price has been under heavy selling pressure since early November last year, alongside other tech heavyweights on the Nasdaq composite. It is likely that Apple Inc will finally breakout from a descending triangle pattern, given the strong after-hours buying seen in the stock following its earnings report release.

Apple’s 50-day moving average offers immediate short-term resistance, while the stock’s 100-day moving average offers an attractive target to buyers if the bullish momentum continues in the medium-term. The FOMC rate decision and monetary policy statement later today are also likely to be a catalyst for Apple’s short-term directional path.

 

Written by Nathan Batchelor, External Analyst

 

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