Amenity Analytics offers an innovative new model to text mining, combining machine learning with a rules-based approach. While rule composition serves as the foundation for our NLP technology, our solution employs full parsing; reducing the number of rules needed and is a profound improvement upon traditional rules-based models.

Amenity Analytics
January 30, 2019

Earnings Analysis: Apple's FY1Q19 More Than Just China

Earnings Analysis: Apple's FY1Q19 More Than Just China

Apple released a detailed update in its negative pre-announcement in early January, and that has been followed by a slew of cautious commentary on China throughout the technology sector.  We used our text analytics platform to look beyond the rehashed China discussion and uncovered 3 takeaways worth exploring.

1. Putting 1Q in Context: Still an 8-Quarter Low

The market may be relieved by the absence of new negatives vs the negative pre-announcement, but Amenity’s NLP platform still flags Apple’s FY1Q earnings call as the most negative in the last 8 quarters.  The Amenity Score of the call was 30, roughly 50% below Apple’s 8-quarter average:

Amenity Score: Apple 8-Quarter Average

2. Some Discussion of iPhone Upgrade Challenges, but No Answers

China stole the headlines, but arguably the more systemic issue is the slowing pace of iPhone upgrades in the developed markets. The topic was addressed in Q&A, with acknowledgment that pricing is an issue and no specific plan for reversing the trend:

Apple (1/29/19):

  • "I do think that price is a factor. I think part of it is that, the FX piece. And then secondly, in some markets as I had talked about in my prepared remarks, the subsidy is probably the bigger of the issues in the developed markets."
  • "The average cycle has extended. There’s no doubt about that. We’ve said several times, I think, on this call and before that the upgrades for the quarter were less than we anticipated due to all the reasons that we had mentioned. So where it goes in the future, I don’t know."

3. Any Positives? Apple Wearables Momentum Mirrors Recent Fitbit Strength

Earnings calls are never one-sided, so we looked for the incremental positives from this otherwise disappointing quarter. Wearables stood out, with demand being strong enough that Apple is hitting supply constraints:

Sentiment Comparison: Wearables Commentary

What is the sentiment in the market around wearables? For a broader view we use Amenity Viewer's Query Insights feature and find consistently positive commentary on wearables this quarter:

Query Insights: Search Results for "Wearable"

Join the Amenity Viewer Beta Program today to analyze earnings call transcriptions and enable you to spot outliers, identify critical insights, and understand key drivers.

This communication does not represent investment advice. Transcript text provided by S&P Global Market Intelligence.

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