A Troubling Apple Chart
Content adapted from this Zerohedge.com article : Source
Apple announced its earnings after the close today. The results were not bad. IPhone sales were down which was offset by increases in others areas. Overall, they beat the top and bottom line.
There is an issue brewing. Inventories of IPhones exploded from this time last year.
And while overall investors were impressed with the results as the bounce in the stock after hours shows, a troubling trend emerged when looking at AAPL's inventory, which soared a whopping 164% Y/Y due to the disappointing "supercycle" sales, confirming that the company is stuck with a lot of unsold iPhone X, a clear indication that the supply-chain is pretty much full at this moment (explaining all the negative commentary by Apple's upstream suppliers) and that Apple will be unable to sell nearly as many iPhones as it hopes unless it engages in some very aggressive cost cutting, slamming ASPs, and betting the house that the successor to the iPhone X will be the much anticipated "supercycle" hit.
Non-adapted content found at zerohedge.com: Source
The rise in inventory is a big red flag. I won't be surprised if Apple's margins drop significantly in Q2. We'll find out in 3 months.
This inventory issue is not something to ignore. I think Apple is in trouble here. Not that I’m surprised, but it’s obvious the sales are going down. Many people can argue about AAPL being a great buy after this recent dip. I personally have my doubts. I think AAPL has still lot of room to the downside.
Good info
Good content.........