Stronger than expected Apple iPhone sales help Apple top Q3 earnings estimate

Stronger than expected Apple iPhone sales help Apple top Q3 earnings estimate
Surprising Wall Street with a strong quarter of Apple iPhone sales, Apple reported stronger than expected fiscal third quarter earnings leading to a 4% pop in after-hours trading on Tuesday. Apple sold 31.2 million units of the iPhone, topping estimates of 26.5 million phones that analysts had expected Apple to report. Last quarter, Apple sold 37.4 million units of its iconic smartphone, while last year it sold 26 million in the same period. After-hours, Apple's shares are up $21.80 to $440.79 after dropping over $7 during regular trading hours.

While analysts had expected Apple to sell 18 million units of the Apple iPad in Q3, Apple actually rang up sales of 14.6 million tablets. That was down sequentially from the 19.5 million sold last quarter and down from the 17 million it sold last year during the same three month period.

For the quarter, Apple reported a profit of $6.9 billion or $7.47 a share. That topped an estimate of Wall Street analysts by 15 cents a share. Last year, the company reported third quarter profits of  $8.8 billion or $9.32 a share. Revenue came in at $35.3 billion for 2013, up from $35 billion last year. Apple forecast that it will produce revenue in the range of $34 billion to $37 billion for the fiscal fourth quarter. Analysts expect Apple to report $37 billion in revenue for the period.

Apple CEO Tim Cook once again hinted at a Apple iWatch when he mentioned that new products are on the way. "We are laser-focused and working hard on some amazing new products that we will introduce in the fall and across 2014," said Cook after Apple reported its earnings. Apple recently filed to trademark the iWatch name in various countries. A recent report stated that an Apple iWatch release has been delayed as Apple has hired more engineers to help them get to the next level in designing the product.


source: WSJ

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46 Comments

46. networkdood

Posts: 6330; Member since: Mar 31, 2010

I guess people still enjoy being reamed up the a....overpaying for inferior products is what Apple customers are known for.

45. networkdood

Posts: 6330; Member since: Mar 31, 2010

Wow, good to see people cheering for corporate America, when they do not give a rat's are about you.

43. itsdeepak4u2000

Posts: 3718; Member since: Nov 03, 2012

Yes because of overprices, but good job though.

42. kaira

Posts: 26; Member since: May 12, 2013

Something is wrong about these sales??? I smell a rat, and I do believe this is to only appease Investors/shareholders.... and also the media circus! Apple has reach it's sell-by-date, hence the (new) features on iOS7 (ANDROID RIPOFF)...

38. xtian1103

Posts: 364; Member since: Feb 11, 2012

Great job apple! Revenue announcement is over, now please announce the new iphones ok. And please release the ios 7 final version.

29. -box-

Posts: 3991; Member since: Jan 04, 2012

Does apple count warranty exchanges, refurbished, trade-ins, and defective units as sales?

34. tedkord

Posts: 17519; Member since: Jun 17, 2009

Trade ins probably. I doubt the others.

22. roscuthiii

Posts: 2383; Member since: Jul 18, 2010

Amazing what reduced price offers and even older model sales can do for ya!

28. Finalflash

Posts: 4063; Member since: Jul 23, 2013

Right, based on the profit drop even on higher revenues, it suggests that the lower profit margin items sold more. In other words, iPad minis and older iPhones. This is just the same deception as when Samsung reports "shipped" devices for a unique model, Apple only reports total sales of iPhones without differentiating which model sold how much. Looking into this further, a large amount of iPhones sold than was expected which should have easily made up for the lack of iPads sold. Only 2.5 million fewer iPads were sold where as 5 million more iPhones were sold compared to the year before. Which is disconcerting because the profits were still less than the year before. Assuming iPads have less margin than even the lower model iPhones (iPad 4 has almost same hardware with a much larger screen, battery, chasis at 500 retail for 16gb where as 16gb iPhone 4s is 550 and iPhone 5 at 650) this should have been easily made up for with 5 million more iPhones selling. Which means that even the 4s might not be selling much and even the iPad 4 isn't. All the lower margin products are selling for some reason and all the high margin ones are likely selling at a discount only and not at full price (which would allow for a 2 billion drop in profits for the same revenue compared to the year before period). This likely does not bode well for Apple in the future. Right now it is okay, as they are making a lot of money. But assuming it continues the trend next year for the current range of products, profits will keep shrinking. If revenues drop (fewer sales) then profits will take a serious dive. Apple needs new EVERYTHING and fast, since people are losing interest in their newer products apparently. They need to do a Mac Pro style revamp to everything. The macbook line is too stale and almost a decade old with minor changes. The iPhones have more than just a software issue in terms of how old it feels (and no new colors and flatter look aren't going to revolutionize much). iPads need a little push too but more for the larger ones than the minis (although the drop is sales is likely because they didn't release a new iPad this year in spring). iWatch...I hope it is good because I really cannot think of any reason to buy it, hopefully they find a good niche for it if not wider appeal.

31. Googler

Posts: 813; Member since: Jun 10, 2013

Agreed. I think the incremental updates are starting to backfire on Apple, why pay for a new iPad when the one you have (even two years old) isn't that much different than the newest model? Unless iOS7 puts a huge crunch on performance, there really isn't much reason to upgrade when the product you own works fine. Phones are a bit more contract driven but with Apple still selling the 4 at a big discount, is there really a ton of reasons to get the 5? Apple needs to come big and high priced, mid range plastic phones isn't big. It's going to be an interesting six months or so to see what they bring out next.

35. roscuthiii

Posts: 2383; Member since: Jul 18, 2010

Nice write-up. I think PA may be looking for staff... might wanna toss your hat in the ring.

11. androidfanboy

Posts: 162; Member since: Jun 24, 2013

Apple has already peaked

12. Napalm_3nema

Posts: 2236; Member since: Jun 14, 2013

Based on what? They beat expectations without a single new mobile product in 2013. Think again.

15. tedkord

Posts: 17519; Member since: Jun 17, 2009

Expectations were low.

16. darkkjedii

Posts: 31797; Member since: Feb 05, 2011

Exactly Napalm... He dislikes apple so much, that he'll say anything to get some green, and lol's even something silly like that. Apple hasn't peaked anymore than tech has, what will he say, when apple unleashes its fall 2013, and 2014 product line and its a smash hit with consumers, and Wall Street?

9. darkkjedii

Posts: 31797; Member since: Feb 05, 2011

I would say apple is back, but they never left. This trying period of time has been good for apple, it's made them get of their butts, stop resting on their laurels and get back in the lab. 2013 will be great, 2014 will be bomb. Lets get it in apple.

8. verbalize

Posts: 150; Member since: May 03, 2013

Who said the High-end smartphone Industry is saturated? Good going Apple. When you have a great product people will buy it. With Samsung's poor phone sales this last quarter they better pick up their game or they're going down the drain.

14. tedkord

Posts: 17519; Member since: Jun 17, 2009

Poor sales? They sold more than twice as many smartphones as Apple, the GS4 outsold the iPhone 5, and they had a record quarter with more profit than Apple. We should all do so poorly.

18. Jason2k13

Posts: 1485; Member since: Mar 28, 2013

i dont remember any of samsungs high-end phone having poor sales? Even their low and mid phones sells more than any other manufacturers in that category.

23. stealthd unregistered

S4 didn't sell BAD, but it was below expectations

33. tedkord

Posts: 17519; Member since: Jun 17, 2009

It sold 20 millIon in two months. That's just not bad? It looks like it outsold the iPhone 5 for the quarter, and it only had two months of the three while the iPhone had all three.

39. verbalize

Posts: 150; Member since: May 03, 2013

And the IPhone is almost a year old. Then you have the SG4 that's been out for 11 weeks and they sold less phone of it in the same period. The SG4 is already Discounted for $99 with contract. Can't be selling Too we'll if they are almost giving it away with contract. LOL

41. tedkord

Posts: 17519; Member since: Jun 17, 2009

I'll repeat it. 20 million in two months. If that's not selling well, nothing sells well.

5. livyatan

Posts: 867; Member since: Jun 19, 2013

Apple profit -6.9 billion Samsung profit - 8.5 billion

6. christianqwerty

Posts: 467; Member since: May 05, 2011

iPhone vs galaxy s4, s4 activ, s4 mini, galaxy zoom, galaxy core, galaxy express, galaxy steller, samsung activ odessy, Samsung lightray, samsung stratosphere , ECT.......

13. tedkord

Posts: 17519; Member since: Jun 17, 2009

Ok then... IPhone 5 Q2 sales - 22 million Galaxy S4 Q2 sales - 23 million Good enough?

20. greathero1

Posts: 584; Member since: Jun 13, 2008

Not really. 10 month old phone at the end of its life cycle vs brand new product. I say, not bad. Kudos to both for racking up great numbers.

24. darkkjedii

Posts: 31797; Member since: Feb 05, 2011

Best post out the bunch. +1

27. Googler

Posts: 813; Member since: Jun 10, 2013

Apple is still selling the iPhone 4, how is the 5 near the end of it's life cycle?

40. willard12 unregistered

In all fairness they are only selling the iphone 4 until next month....before the ITC bans it for copying.

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