The most valuable company in the world has had an incredible few years. It’s broken records year quarter after quarter, and its earnings and stock price have soared. But this quarter was different. In earnings results announced today, Apple missed its revenue and earnings targets, and its market cap fell by $40 billion. Its shares fell 8% in after earnings trade.
To illustrate how unusual this quarter was for Apple, this is a list of its official press releases titles. The company had titled its last 17 quarterly press reports as “Apple Reports Record Results”, but this quarter, the word “record” was somberly dropped from the headline.
A word is missing from Apple's press release title today. pic.twitter.com/fv2Niabgd0
— Benjamin Mayo (@bzamayo) April 26, 2016
Apple’s poor earnings are party thanks of slowing iPhone sales worldwide. In the same quarter last year, Apple had sold 61 million iPhones. That number fell to 50 million this year. Its iPad sales also fell from 12 million to 10 million. Its revenue, predictably, fell over 10% to $50 billion.
And more worryingly, Apple predicts that this period of slowing growth will continue. Its guidance for next quarter for tepid, and this in part spooked investors which led to the drop in stock price.
And when a stock like Apple drops 8%, it means a significant amount of wealth erosion. The $40 billion drop from Apple’s market cap is, well, quite a lot of money – as much as 3 times Twitter’s entire net worth.
Apple's market value is down nearly three Twitters $AAPL $TWTR
— Scott Austin (@ScottMAustin) April 26, 2016