We apply our text analytics model to analyze Apple's January 2nd investor letter to help address four specific questions that go beyond the headlines that everyone already knows. How bad was it? Does our "Deception" Analysis reveal anything? Where else to look for China fallout? How does Apple's release compare to comments in the smartphone ecosystem? Find out in our article.
On January 2, Apple issued a letter to investors that negatively pre-announced its 4Q results. We analyzed the text of the investor letter using our NLP model to help address four specific questions beyond the basic headlines that all market participants surely know by now.
Applying Amenity Analytics’ NLP model and its hundreds of event classifications, we were able to quantify the tone of the investor letter vs recent earnings calls. The text of the letter registered an Amenity Score of -36, vs the Q4 transcript at 48 and its average over the last 2 years of 60.
Apple's Q4 Earnings Call (11/1/18):
Apple's Q1 Investor Letter (1/2/19):
We often find cracks in management confidence by looking at our “Deception” analysis, where our text analytics identifies 10 linguistic patterns (“Events”) that may indicate evasive language, attempting to spin a negative, tension with the analyst community, etc.
The Q4 earnings call showed 8 events highlighted in our “Deception” analysis, which was flat compared to the 8 events captured in Q3. Next, we looked at what topics on the Q4 call triggered those events, and found that answers relating to Emerging Markets, Guidance Assumptions, and the removal of iPhone unit disclosures accounted for 7 of the 8 “Deception” events:
This speaks to the value of the unscripted Q&A sections of the quarterly earnings calls, and we will be focused on the Q1 earnings call when Apple is inevitably posed these types of questions: Was it a coincidence that you decided to withdraw iPhone unit disclosure one quarter before iPhone demand fell off a cliff?
In our December 11th post, we highlighted the disconnect between bullish commentary from the MedTech sector and macro and tariff risks in China. Will the tone be different at next week’s J.P. Morgan Healthcare Conference?
Varian Medical Systems (10/23/18):
Waters Corporation (10/23/18):
Bio-Techne Corporation (10/30/18):
We used Amenity Viewer’s Query Insights tool to quickly scan for supporting or contrasting comments from other companies in the smartphone ecosystem.
Himax Technologies (11/8/18):
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This communication does not represent investment advice. Transcript text provided by S&P Global Market Intelligence.
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