Why Apple’s Q4 earnings look different this year

On Thursday, Apple delivered a Q4 earnings beat but the stock slid anyway as wary investors saw worse than expected iPhone revenues. At the time of writing, stock was down around 5% in after-hours trading.

It was a mild beat, with Apple posting $64.7 billion compared to the $63.7 billion Wall Street was expecting and $0.73 earnings per share versus an estimated $0.70. While Apple showcased all-time highs in the Services and Mac divisions, iPhone revenues were down 20% year-over-year.

Generally, Apple’s Q4 earnings feature a bit of a bump from the first few days of sales of the new iPhones, but with Apple running a few weeks behind this year, their launches have missed the window to be included on Q4 and will instead all be bundled into the Q1 holiday quarter.

The iPhone 11 and iPhone 11 Pro dropped on September 20 of last year, while this year’s iPhone 12 was released more than a month later, on October 23, while the iPhone 12 Pro has still yet to launch but will be available November 13.

The bigger question is how this delay might affect the company’s entire product release schedule. Will the iPhone 12 and 12 Pro see a shorter life cycle than previous models or will October/November be the new launch timeline for the company’s smartphones going forward?

Digging into the other numbers beyond iPhone, Apple showcased $9.03 billion in Mac revenue for Q4, $6.80 billion in iPad, $7.87 in Wearables etc. and $14.55 billion in Services revenue. Interestingly, this is surely the closest Apple’s Services revenues have gotten to iPhone sales to date, with revenues there reaching just over one-half of overall iPhone sales for Q4. In 2019, the ratio was closer to 1:3.

Next quarter is likely to be big revenue-wise, but investors don’t seem to have been wooed with Q4.