Apple shares would have to soar 24% above current levels to hit that mark.
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Apple Inc. (NASDAQ:AAPL) rallied $4.67 to $101.34 in after-hours trading after it reported fiscal results for the third-quarter. Apple stock spiked over 7% on Wednesday, on track for its best day since April 2014.
Overall, Apple turned in a quarterly profit of $7.8 billion, or $1.42 a share, on revenue of $42.4 billion, compared to a earnings of $10.7 billion, or $1.85 a share, on $49.6 billion a year ago.
Apple reported revenue for Q3 of $42.4 billion (GAAP), down 14.5% year-over-year (YoY), but that narrowly beat expectations of closer to $42 billion. That downtrend isn’t expected to change direction soon, either. It gave that same estimated range for the current quarter ending in September, and said it anticipates revenue coming in between $45.5 billion and $47.5 billion, which would mark another decline from a year ago. Declining sales are expected to continue for Apple as it forecast further falling sales in the fourth quarter to between $45.5bn and $47.5bn. To Apple’s credit, the number of iPhones sold fell 21% from the March quarter, better than the 22% sequential decline past year, although that was after the biggest-ever six-month stretch of iPhone sales. It is the last one before the next iPhone model is released in the fall.
“The growth was broad-based with App Store revenue up 37 percent to an all-time high”, Cook said in a conference call.
Let’s begin with iPhone sales, which at 40.4 million, is the lowest sales Apple has seen since Q4 2014. Now, even if Apple had some fancy new phone to sell – which it doesn’t – most consumers are not ready for an upgrade. That makes this version of Apple like the Chicago Cubs: wait until next year.
Apple’s services business, which includes the App Store, Apple Pay, iCloud and other services generated almost $US6 billion in revenue, up 18.9 per cent from the previous year. Cook says the Apple Watch remains the best-selling smartwatch in the world, however, and he cites high customer satisfaction ratings and watchOS 3 as reasons to be optimistic about the product.
Meanwhile, Apple has asked the Indian government to elaborate the rules and sought more clarity. That user base makes for a sizable opportunity. And Apple’s habit of keeping quiet until it has a finished product to show – in contrast with rivals such as Google and Facebook, which iterate products in the open – doesn’t help, said analyst Bob O’Donnell of TECHnalysis Research. Sales in China fell 33% to $8.85 billion in Q3 of this year.
Sales of the iPhone saw a massive jump in 2015, following Apple’s release of the iPhone 6.
“When we ask ourselves “Do we see Apple gaining or losing its next $100 billion of value”, the answer is losing”, Colin Gillis, an analyst for BGC Partners, wrote in a Monday note. CFO Luca Maestri commented “There are some macro conditions that exist in China, both in mainland China and in Hong Kong”. A second generation Apple Watch is rumoured to be coming out later this year. The assessment echoes something BGC analyst Colin Gillis also recently said: “Apple has peaked under the leadership of CEO Tim Cook”.
And the iPhone 7 does not seem to be promising much in new features; it even looks identical to the iPhone 6s.
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As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
