- Title: APPLE-RESULTS/EARNINGS Apple gives weak forecast, shares fall more than 6 percent
- Date: 21st July 2015
- Summary: NEW YORK, NEW YORK, UNITED STATES (JULY 21, 2015) (REUTERS) (SOUNDBITE) (English) MAX WOLFF, CHIEF ECONOMIST AT MANHATTAN VENTURE PARTNERS, SAYING: "So Apple is kind of always a 'buy the rumor, sell the fact,' they tend to trade off a little bit, which they did today on the news. The news is generally very good. 39.7 percent margin, that is phenomenal, that's 40 percent ma
- Embargoed: 5th August 2015 13:00
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- Location: China
- Country: China
- Topics: General
- Reuters ID: LVAUSPR6WMX41UBNLK7AVNLP2FW
- Aspect Ratio: 16:9
- Story Text: Apple Inc forecast fourth-quarter revenue below estimates and missed some targets for iPhone sales, sending its shares down more than 6 percent in after-hours trading.
Apple said on Tuesday (July 21) it sold 47.5 million iPhones in the third quarter, up 35 percent from a year ago. But some analysts had expected around 49 million.
The company forecast revenue of $49 billion (USD) to $51 billion, missing analysts' average estimate of $51.13 billion according to Thomson Reuters I/B/E/S.
The world's largest publicly traded company by market value said it sold 47.5 million iPhones in the third quarter, up 35 percent from a year ago, but down 22 percent from 61.2 million in the second quarter.
"They shipped a few less phones than everyone thought, just under 48 million and people had kind of thought, on a whisper basis, it would be at least 50," said economist Max Wolff.
"But still phenomenal, 35 percent year over year growth, huge revenue number, closing in on $50 billion on a quarterly basis, which is phenomenal."
The company's iPhone 6 and 6 Plus, which shattered iPhone sales records when they were launched, are already 10 months old.
Sales in China more than doubled to $13.23 billion from a year earlier, the company said.
Apple shares fell more than 6 percent in extended trading, after closing nearly 1 percent lower at $130.75 on Nasdaq.
"So on the sort of negative news here, they were below the unit shipments on the iPhone and this is an iPhone company," Wolff said.
"Sixty-five percent of revenue about, 65 percent plus of profit right? They had huge China growth numbers, which is a big plus, huge margin, which is a big plus. On the negative side, they guided down on the revenue basis, to the bottom of their range for the next quarter, which is a really minor concern and they have a long history of doing this, only to beat the lower guidance and they didn't really lower the guidance as much as widen it to the downside."
Apple had a troubled day, with its App Store, Apple Music, iTunes Store and some other services suffering disruption for more than three hours before results were released. Apple also did not release the sales numbers for its Apple Watch.
"I think they're going to have a real hard time shipping more than 10 to 12 million watches this year," Wolff said.
"I just don't think the watch matters on a profit or a revenue basis. I think it matters on an innovation basis. I think the real early adapters love it. They had some glitches in the roll out globally, some issues moving the volume and the supply chain. We just don't think it's going to be a huge product for them for at least another year or so."
The company said net income rose to $10.68 billion, or $1.85 per share, from $7.75 billion, or $1.28 per share, a year earlier.
Analysts had expected earnings of $1.81 per share, according to Thomson Reuters I/B/E/S.
Revenue rose 32.5 percent to $49.61 billion from a year earlier, beating Wall Street's expectations of $49.43 billion. - Copyright Holder: REUTERS
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