Apple’s stock was under pressure in trading on Monday (Jan. 29) as concerns mounted about its fiscal first quarter results.
According to news from CNBC, citing Jim Cramer of “Mad Money,” Wall Street is casting a healthy dose of skepticism on how the iPhone X and iPhone 8 fared in the quarter, with many expecting shipments to come in lower than previously forecasted. CNBC pointed to a report on Monday (Jan. 29) that said Apple told suppliers to reduce their production of the iPhone X to 20 million units, which is half of what was expected to be produced during Apple’s first quarter.
“The question is: Are the earnings estimates going to come down enough that it becomes an expensive stock?” Cramer, whose charitable trust owns shares of Apple, said in the CNBC report. “I don’t think anybody believes at this point that the next quarter will be as good as we thought.”
While Cramer thinks Apple’s position could present a buying opportunity for investors, he said he wouldn’t sell his stocks to try and make some money, since the company has accrued quite a bit of money — thanks to the tax reform — that it can send shareholders’ way. Apple has previously stated it would repatriate all of its $250 billion in cash it has held overseas.
The most recent results will represent the first quarter where sales from the iPhone X will be taken into account. Notably, the December-ending quarter tends to be Apple’s strongest performer of the year. Apple’s previous quarterly revenue record was $18 billion. According to marketplace analysis in lieu of hard numbers from Apple, Canalys estimates Apple shipped 29 million iPhone Xs in the quarter, making it the top-selling smartphone in the run-up to Christmas. Analysts are looking for Apple to have shipped 81 million phones worldwide this holiday season and for total revenues to have increased by 11 percent to $86 billion. Sales of Apple’s iPhone are expected to carry two-thirds of that result.