Strong iPhone Sales; Apple Stock Down With Few Watch Details

22 Jul 2015 | Author: | No comments yet »

Apple Plunges On Light iPhone Sales, Weak Outlook.

Apple released earnings Tuesday for the quarter that included the debut of the Apple Watch, the first new product category from the tech giant since the launch of the iPad. BENGALURU/SAN FRANCISCO (Reuters) – Apple Inc shares slumped nearly 7 percent in after-hours trading as its fourth-quarter revenue forecast fell short of estimates and it missed some targets for iPhone sales.Apple stock tumbled 8% in after hours trading Tuesday (July 21) after the company reported it sold fewer iPhones than expected in the past three months and offered a weak outlook for the current quarter.Apple revenues for the month ending June 2015 rose 33% to $49.6 billion while earnings were up 45% to $1.85 a share — beating the Thomson Reuters I/B/E/S consensus by four cents a share.

Apple Chief Financial Officer Luca Maestri said in an interview the results in China were “spectacular” during the quarter and noted plans to open 40 stores there over the next 12 months. The good news for iPhones was that the average selling price of $660 was above expectations suggesting that sales were better “for the larger 6 Plus model which is particularly popular in China,” according to FT. As Apple had previously announced, the company gave no hard numbers on sales of the device, instead grouping those results with iPods, Apple TV and other devices. He noted that in the nine weeks since its launch in late April, the device has sold better than either iPhones or iPads over a similar period after their launch.

SUN VALLEY, ID – JULY 09: Tim Cook, chief executive officer of Apple Inc., attends the Allen & Company Sun Valley Conference on July 9, 2015 in Sun Valley, Idaho. (Photo by Scott Olson/Getty Images) Apple CEO Tim Cook was exuberant. As he said, “We had an amazing quarter, with iPhone revenue up 59 per cent over last year, strong sales of Mac, all-time record revenue from services, driven by the App Store, and a great start for Apple Watch. The “Other” category that includes the smartwatch grew by less than $1 billion, both sequentially and year-over-year, and analysts on average expected Apple to collect more than $1.8 billion from initial sales of Apple Watch, according to a FactSet survey. Piper Jaffray analyst Gene Munster wrote that those numbers equaled sales of about 1.2 million devices, far lower than his 3 million projection and the consensus expectation of 4 million. Colin Gillis, an analyst for BGC Partners, said the results highlighted the vulnerability of Apple’s dependence on the iPhone and the Chinese market’s growing importance to the company. “Where are you going to find growth in the world?” he said. “You’ve done an amazing job sucking all the smartphone profits into your balance sheet, but smartphone sales are slowing.

The world’s most valuable company is primarily reliant on the iPhone: Apple posted iPhone sales totaling $31.37 billion in the quarter, more than 63% of its $49.6 billion total. 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’s current-quarter revenue outlook — $49 billion to $51 billion — was at the low end of the FactSet Research Systems consensus of $50.9 billion. Both executives said Apple’s vagueness on Apple Watch sales was an attempt to keep secrets away from other tech companies looking to score in the wearables category.

However, Apple gave plenty of information about iPhone, Mac and iPad sales, despite heavy competition in the smartphone, personal-computer and tablet markets, respectively. The Surface is an excellent convertible device and is experiencing torrid 117% quarter-over-quarter growth, but has taken years to finally get near the billion-dollar-a-quarter territory. When asked for more information on the competitive Watch insights such information would reveal, an Apple spokeswoman declined to go into more detail.

Apple Watch’s out-of-the gate numbers are somewhat reminiscent of the first iPhone, which sold 1.1 million units in its first quarter in 2007 (ah, the days when Apple reported units sales for everything). Ives believes Apple won’t wait long to start providing the information, especially as more and more analysts attempt to discern sales on their own from the information Apple does provide. That got me thinking: If Apple sold 3 million Apple Watches (a number on the high end of my expectations, but at least inching closer to some analysts’ outlandish estimates), it would account for $1.5 billion of the $2.6 billion quarterly revenue number.

Here you can write a commentary on the recording "Strong iPhone Sales; Apple Stock Down With Few Watch Details".

* Required fields
Our partners
Follow us
Contact us
Our contacts

ICQ: 423360519

About this site