Apple’s warning to investors that its holiday sales could come in below Wall Street forecasts caused the stock to fall as much as 7.5% late Thursday, pushing the company’s market cap below the $1 trillion level.
Apple’s stock first surpassed the $1 trillion mark on Aug. 2 and has held above that level since then. According to Nasdaq, Apple has 4.83 billion shares outstanding. In after-hours trading Thursday, Apple’s stock fell as low as $205.50 a share, 7.5% below the closing price of its stock during active trading Thursday and low enough to give Apple a market cap of $992.5 billion.
The company said revenue in the fourth-quarter, typically Apple’s busiest because of the holiday season, could come in below analyst expectations.
Apple’s revenue rose 20% to $62.9 billion while net income came in at $2.91 a share. Both surpassed analyst estimates, which is often good news for investors. This time, however, the focus was put on Apple’s outlook, amid broader concerns that economic growth may slow down in coming quarters.
In the current quarter, Apple said its revenue would come in between $89 billion and $93 billion. Analysts had forecast revenue of $93 billion.
Another point of concern was that the iPhone, which makes up 60% of Apple’s revenue, saw shipments of 46.9 million units last quarter, below Wall Street’s forecast of 47.5 million. Because demand for Apple’s newer, and more expensive, iPhones was high, iPhone revenue came in at $37.2 billion, above the consensus forecast of $35.6 billion.
Adding to investor uncertainty, Apple said starting next quarter they will stop disclosing how many iPhones, iPads, and Macs they sold.
In an interview with Reuters, Apple CEO Tim Cook blamed the cautious guidance in the current quarter on weakness in emerging markets and uncertainty about Apple’s ability to keep up with demand for its newer products.
Apple is “seeing some macroeconomic weakness in some of the emerging markets,” Cook told Reuters. In addition, he said, foreign exchange rates would have a $2 billion negative impact on Apple’s sales forecast. Cook said he wasn’t sure whether Apple can meet demand for the new iPhones, Watches, iPads, and Macs that have been released in recent weeks.
Apple made stock history by becoming the first U.S. Company and the second company overall (after China’s Petrochina) to attain a market value of $1 trillion. Amazon briefly joined Apple into that elite club but has since lost more than 20% of its value.
In late trading, Apple recovered somewhat to $207.8 a share, enough to return it to a $1 trillion market cap. Stock moves in after-hours trading can be volatile because trading is more illiquid than during official trading sessions. It’s possible Apple’s stock will open with a market cap above $1 trillion once the markets open.