Oh No, Why Is Apple Getting Crushed?

Corporate revenues in the United States have been falling for quite some time, but now some of the biggest companies in the entire nation are reporting extremely disappointing results.  On Tuesday, Apple shocked the financial world by reporting that revenue for the first quarter had fallen 7.4 billion dollars compared to the same quarter last year.  That is an astounding plunge, and it represents the very first year-over-year quarterly sales decline that Apple has experienced since 2003.  Analysts were anticipating some sort of drop, but nothing like this.  And of course last week we learned that Google and Microsoft also missed revenue and earnings projections for the first quarter of 2016.  The economic crisis that began during the second half of 2015 is really starting to take hold, and even our largest tech companies are now feeling the pain.

This wasn’t supposed to happen to Apple.  No matter what else has been going on with the U.S. economy, Apple has always been unshakeable.  Even during the last recession we never saw a year-over-year decline like this

Apple today announced financial results for the second fiscal quarter (first calendar quarter) of 2016. For the quarter, Apple posted revenue of $50.6 billion and net quarterly profit of $10.5 billion, or $1.90 per diluted share, compared to revenue of $58 billion and net quarterly profit of $13.6 billion, or $2.33 per diluted share, in the year-ago quarter. As expected, the year-over-year decline in quarterly revenue was the first for Apple since 2003.

I think that this announcement by Apple is waking a lot of people up.  The global economic slowdown is real, and we can see this in iPhone sales.  During the first quarter, Apple sold 16 percent fewer iPhones than it did during the same quarter in 2015.  This is the very first year-over-year quarterly sales decline for the iPhone ever.  Here are some of the specific sales figures from the Apple announcement…

Apple sold 51.1 million iPhones during the quarter, down from 61.2 million a year earlier, while Mac sales were 4.03 million units, down from from 4.56 million units in the year-ago quarter. iPad sales were also down once again, falling to 10.25 million from 12.6 million.

Once these numbers hit the wires, shares of Apple immediately began to plummet during after-hours trading.  In fact, USA Today is reporting that Apple has already lost 43 billion dollars in market value since the annoucement…

Shares of Apple are getting hit roughly 8% in after-hours trading, tumbling to $96.67. They closed in regular trading at $104.35, or down 0.7%, putting them down 0.9% for the year. The downward move in after-hours trading means the company shed $43 billion in market value based on after-hours trading.

Wow.

Meanwhile, shares of Twitter are crashing in after-hours trading after the social media giant also announced very disappointing results.  The stock has now dripped below 16 dollars a share, and the company continues to lose tremendous amounts of money

For all its other travails, Twitter is unprofitable. It narrowed its loss but still recorded a loss of $79.7 million, or 12 cents a share, compared with a loss of $162.4 million, or 25 cents a share, in the year-ago quarter.

Of course it isn’t just the tech giants that are troubled these days.

On Tuesday we learned that same-store sales for Chipotle declined by a whopping 29.7 percent during the first quarter, and appliance manufacturer Whirlpool has seen sales fall all over the planet

Whirlpool, the world’s biggest appliance manufacturer, has become the poster child for the deep challenges facing multinational companies these days.

– Latin American sales plunged 22%.

– Revenue fell 8% in Europe, Middle East and Africa.

– Asia sales dipped 2%.

When is it finally going to sink in for most people?  The global economy is slowing down significantly, and the next global economic crisis is already here.

Of course the oil companies are feeling more pain than anyone else.  According to CNN, the crash in the price of oil has cost the 40 largest publicly-traded U.S. oil producers 67 billion dollars

American oil companies are drowning in a sea of red ink.

The crash in crude oil prices caused a stunning $67 billion in combined losses by 40 publicly-traded U.S. oil producers last year, according Energy Information Administration research. And the bleeding is expected to continue at least early this year for many.

The losses surpassed $1 billion each from struggling oil companies like EOG Resources (EOG), Devon Energy (DVN) and Linn Energy (LINE) as well as SandRidge Energy (SD), the shale oil driller that recently admitted it’s exploring a bankruptcy filing.

That is an astounding amount of money.

These days we throw around terms like “millions” and “billions” so much that they almost lose their meaning.

But this is real money that we are talking about here.

In recent days, Barack Obama has been running around boasting that he saved the world economy from another Great Depression.  But that isn’t true at all.  Instead, our “leaders” have simply set the stage for a larger and more painful crisis.  I like the way that Doug Casey recently put it

You’ve got to remember that all of these governments and central banks all around the world have driven interest rates not just to zero, but to negative levels in some cases… and they are simultaneously printing up trillions of currency units. And even while they are desperately doing that the economy is falling apart in lots of different ways.

…They’ve created a super-bubble in bonds, a bubble in stocks, and meanwhile commodities have collapsed and are below production costs in many cases.

…The economy is going to be very, very bad… It’s the next stage of what I call the Greater Depression. 

Whether you want to call it a “Great Depression”, a “Greater Depression” or “The Greatest Depression”, the truth is that we are heading into a period of time that will be unlike anything any of us have ever experienced before.

The greatest debt bubble in the history of the planet is starting to implode, and this time the central bankers and the politicians are not going to be able to put the pieces back together again.

But just like in 2008, the vast majority of the population will not recognize the warning signs until it is way too late.

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About the Author: The Economic Collapse Blog

  • Joe Cabot

    People change their spending habits based on the political party infesting the Oval Office? Where do you come up with this stuff?

  • K Wood

    Using the velocity of money as your premise. Were you to look the velocity of money is nears it’s lowest for the volume of money that the fed and the banks have available. That is one of the reasons that the US economy growth is so low. That money is not being lent to promote growth as it has in the past.

  • daniel1154

    You know my background already.

  • daniel1154

    Because the Democrat party is for sale to Wall Street and big corporations. Look at Hilary and the banks.

  • Mike

    Tell me daniel, do you have a real job and a college education? Or do you live in your Mothers basement whining about how hard life is? You don’t seem to understan basic economics and appear from your comments to be nothing more that a poorly paid commentor for the RNC…

  • JohnDille

    WHY??? DID THEY HAPPEN TO HAVE A SPARE 15 BUCKS LEFT LYING AROUND, AFTER THEY AND THE KOCK BROTHERS SPENT BILLIONS BUYING THE REPUBLICAN PARTY??? MAY AS WELL SPEND A FEW BUCKS TO BUY A PACKET OF DEMOCRATIC AIR FRESHENER TO MAKE THE RIGHT WING REPUBLICAN BILLION DOLLAR BARNYARD SMELL BETTER!!! RIGHT???

  • daniel1154

    George Soros and Goldman Sachs bought the Democrat party.

  • Mike

    Joe,’
    Let’s see if you know crap about economics…. The reason that the Liberal Presidents are so successful has to do with “The Velocity of Money”. When the 97% have more money, they spent it and jobs are created “In America”…. Really is not rocket science… Under the Conservative Presidents, money moves away from the 97% to their handlers, the 3% and little is spent…

    First rule learned in Business School: “During Conservative Domination markets Flounder and under Liberal Progressive leadership, the Markets Flourish”…

    Since 1929, $10,000 invested ONLY in Liberal Presidencies would have grown to over $350,000. During the same time the same amount invested ONLY during Conservative Presidencies would have only grown to $11,000 roughly… In other words, you would be underwater investing ONLY in Conservative Administrations..

    Can you understand that Joe?

  • JohnDille

    REPUBLICANS CONTROL CONGRESS… AND 31 STATES… TOTALLY… BECAUSE THE KOCK BROTHERS ARE BUYING UP THE FEDERAL GOVERNMENT… JUST LIKE THEY HAVE BOUGHT ALMOST TOTAL CONTROL OF THE LARGE MAJORITY OF STATES!!! AND LITTLE PUPPET DANIEL IS TOO STUPID TO REALIZE THAT… SONER OR LATER… REPUBLICN CONTROL OF AMERICA WILL DESTROY HIS LIFE… JUST LIKE REPUBLICAN CONTROL OF AMERICA HAS ALREADY DESTROYED THE LIVES OF TENS OF MILLIONS OF WORKING CLASS AMERICANS!!!

  • daniel1154

    Republicans control congress because people wanted Obama stopped.

  • Joe Cabot

    You never have explained how these lib presidents have kept stock market crashes at bay. Of course you probably don’t even believe your ludicrous theory. You are so beholden to your band of grifters that, if by some random chance, a republican was sworn into the Oval Office after 8 years of Obomber, and the stock market crashed on inauguration day, you would dig into your bag of babbling tricks and attempt to blame everything on republicans. It’s why you are so fun to watch!

  • JohnDille

    REPUBLICANS BLOCKED MORE STUFF IN THE TWO YEARS THAT DEMOCRATS HAD SLIGHT CONTROL OF BOTH HOUSES OF CONGRESS THAN THEY HAVE SINCE THE KOCK BROTHERS BOUGHT CONTROL OF CONGRESS FOR THE REPUBLICANS IN 2010. SINCE THEN, REPUBLICANS HAVE SUCCEEEDED IN DOING ABSOLUTELY NOTHING…. BECAUSE THAT IS WHAT THEIR BILLIONAIRE MASTERS WANT THEM TO DO!!! DO ABSOLUTELY NOTHING… AND KEEP OBAMA FROM BEING ABLE TO DO ANYTHING, AS WELL!!!

  • daniel1154

    Nobody is invested in the market other than insiders because everyone knows the Democrats have rigged the system.

  • daniel1154

    Obama had a veto proof congress until the American people saw what destruction he had done, then they elected Republicans to stop him.

  • Mike

    Boy, is that a a stupid statement… It appears that you have not been invested in the stock Market since March 2009 (Thanks to Obama and the Democratic Majoirty Congress then)? What you believed the Republican lies about another Crash?… How sad ans stupid….. 🙁

  • JohnDille

    YEAH… DANG OBAMA JUST CANNOT GET REPUIBLICANS IN CONGRESS TO SUPPORT HIS ON GOING EFFORTS TO CLEAN UP THE MONUMENTAL MESS THAT GEORGE BUSH JUNIOR LEFT HIM!!! EVEN PRESIDENT HILL;ARY CLINTON WILL NOT BE ABLE TO MAKE MUCH PROGRESS WITH THAT… BECAUSE BUSH’S MESS REALLY WAS THAT BAD… AND ENDLESS REPUBLICAN OBSTRUCTIONISM REALLY IS THAT TOTAL!!!

  • daniel1154

    Got to admit Dillie, Obama and the left have really destroyed this economy.

  • Mike

    Michael,

    You are a very slow learner….. Study some history….. There has NEVER been a Stock Market Crash on the watch of a Liberal Progressive Administration…. Not not, nor in the past……

    Now, that said, if the Conservatives take the Presidency and keep the Congressional Majority (low probability despite the billions from the Koch Brothers) then we have just the folks in position to give us another Stock Market Crash and Depression…… And if it is another Neocon, draft Dodger like Trump, perhaps even WW-lll….. Gez, what a dimwit site!…

  • JohnDille

    WOE, WOE, WOE… SNYDER THE BASHER IS IN HIS PRIME!!! HE MUST HAVE HUGE BETS ON THE DOWNSIDE, AND IS TRYING DESPERATELY TO GET ALL THE REST OF US TO DUMP OUR OVER VALUED STOCKS AND BONDS!!! DON’T WORRY… PEOPLE WILL UNLOAD ALL OF THOSE ASSETS… AT FIRE SALE PRICES…. IF DONALD TRUMP EVEN LOOKS LIKE HE MIGHT WIN IN NOVEMBER!!! OTHERWISE, THE MARKETS WILL DO LIKE THEY ALWAYS DO… RUN UP… AND RUN DOWN… RUN UP… AND RUN DOWN!!! JUST LIKE THE TIDES COME IN… AND GO OUT… AND COME IN… AND GO OUIT!!! SO… NONE OF THIS HAS ANYTHING MUCH TO DO WITH OBAMA, AT ALL, REPUBLICAN OPINIONS TO THE CONTRARY! ITS JUST NATURE TAKING ITS COURSE… WITH SOME HELP FROM THE REPUBLICANS ON WALL STREET WHO MAKE TRILLIONS PICKING OUR POCKETS, NO MATTER WHICH WAY THE MARKETS MOVE!!!