Apple revenue, profit exceed expectations
Apple exceeded Wall Street’s expectations for revenue and profit for its quarter that ended July 1, as anticipation builds for new smartphones to be released this fall, the 10th anniversary of the original iPhone.
However, the Cupertino company’s revenue projections for the quarter that will end in September, the month when new models are traditionally released, spanned a wide range, suggesting that long-rumored technical problems could delay at least some phones until the holiday quarter.
It offered a revenue range of $49 billion to $52 billion in the the current quarter. Analysts projected $49.1 billion.
After closing at $150.05, Apple shares rose more than 6 percent in after-hours trading following release of the results.
Releasing the new iPhones in mid- to late September produces a few weeks of revenue that are included in the company’s fiscal fourthquarter results. Some analysts had reduced their projections because of concern that the new high-end iPhone may be delayed, but Apple’s forecast on Tuesday calmed those fears.
“We’ve put everything we know into coming up with the guidance,” Chief Executive Officer Tim Cook said in an interview on Bloomberg Television.
“We really like what we see for the beginning of the back-to-school season.”
Apple is expected to introduce three handsets this year: a revamped top model, known for now as the iPhone 8, and upgrades to the existing iPhone 7 and iPhone 7 Plus, people familiar with the plans have said. The high-end iPhone will include an organic light-emitting diode screen, but reported shortages of OLED supplies mean that the top-of-the-line iPhones will not be as readily available as the cheaper handsets initially.
Cook said reporting about the new versions of the iPhone led people to hold off on buying them, perhaps for longer than usual.
In an interview with the New York Times, Chief Financial Officer Luca Maestri said Apple saw increases in sales and revenue in every product category, including iPads, which had been struggling. Global sales of iPhones rose 2 percent to 41 million. Revenue from services, which include app sales as well as iCloud storage and Apple Music, grew 22 percent, ahead of the company’s projections.
For the quarter, Apple reported revenue of $45.4 billion, up 7 percent from the same quar- ter last year. Net income was $8.7 billion ($1.67 per share).
In the same quarter a year ago, Apple reported revenue of $42.36 billion and net income of $7.8 billion ($1.42 per share).
Analysts had expected Apple to report revenue of $44.9 billion and net income of $8.2 billion, or $1.57 a share, according to estimates compiled by S&P Capital IQ.
Apple said revenue fell 10 percent in the Greater China market (China, Taiwan, Hong Kong and Macau), where sales have dropped for six consecutive quarters. But Maestri said that sales in mainland China had stopped falling, with business from tourists in Hong Kong dragging down the region’s numbers. “We feel we will do better in the September quarter,” he said.
The company is wrestling with increased competition in China from Samsung, as well as from Chinese companies making Android phones. Apple has also capitulated to pressure from the Chinese government to ban apps and content that the authorities dislike, such as virtual private networking apps that allow Chinese consumers to evade government censors.
Bloomberg News contributed to this report.