In its quarterly update, Apple said profits slumped 27 percent from a year ago to $7.8 billion on a sharp drop in iPhone sales.
Advertisement
Apple said its gross margin was hovering around the 38 percent mark, down slightly from earlier this year when it was a little over 40 percent. The company saw sales and quarterly revenue drop, the second consecutive decline in both metrics. It’s hard to determine what Cook means by “best compare”, especially since he did warn that iPad sales would be down from the 10.2 million Apple reported it sold last quarter.
“We had a June quarter that was better than we had expected 90 days ago”, Apple’s Chief Financial Officer Luca Maestri was quoted as saying by Bloomberg. For the same quarter last year, Apple sold 47.5 million iPhones, 10.9 million iPads, and 4.8 million Macs – this year’s numbers are down across the board. Apple’s guidance for the fourth quarter of fiscal 2016 includes expected revenue of $45.5-47.5 billion and gross margin between 37.5 and 38 percent.
The figures follow a quarter in which Apple’s sales growth stalled for the first time since the launch of the iPhone in 2007.
There was at least one other bright spot in the earnings: Apple says its App Store revenue was its highest ever, and its services business grew 19 percent year-over-year. Analysts believe that the year-over-year drop in sales trend will likely continue and reflect in the third quarter. But if it’s Apple, still the most valuable company in the world, any talk of decline seems grim compared to the past glory of record profits.
The bump-up, worth $25 billion, was about double the size of the entire market value of Twitter, which also reported results late Tuesday. Those businesses generated $5.98 billion in revenue, up from $5.03 billion in the year-ago quarter.
The company sold 40.4 million units of its iconic handset, down 15 percent year over year and 21 percent from the previous quarter. Apple made $6 billion in revenue from its “services” unit and another $2.2 billion in “other products”. “We had a very successful launch of iPhone SE and we’re thrilled by customers’ and developers’ response to software and services we previewed at WWDC (Apple’s Worldwide Developers Conference) in June”.
Advertisement
Reactions within the market to the report were mixed with Apple’s stock initially rising 5.3%, then slipping down a point.
