Apple misses estimates on fiscal third quarter iPhone revenue as the stock takes a dive
Apple sold $39.67 billion worth of iPhones during the fiscal third quarter of this year which covers the months of April through June. This result was 2.4% lower than the $40.67 billion in iPhone revenue collected by Apple over the same fiscal quarter last year. The number also failed to meet Wall Street estimates of $39.91 billion.
Apple generated $5.79 billion in iPad sales during the quarter which wasn't close to Wall Street consensus of $6.41 billion. Year-over-year, this was a 19.8% decline driven by the end of the pandemic. Lack of an exciting new model also was to blame for the decline.
The Wearables, Home and Accessories segment, which includes popular devices such as AirPods and the Apple Watch, reported a small 2.5% increase in sales on an annual basis. For the just-completed quarter, the unit took in $8.28 billion. The company's second-largest division, Services, had another strong quarter with revenue of $21.21 billion, an 8.2% hike over last year. The figure also topped the $20.76 billion in Services revenue expected by analysts.
Apple CEO Tim Cook, discussing the quarter, said, "We are happy to report that we had an all-time revenue record in Services during the June quarter, driven by over 1 billion paid subscriptions, and we saw continued strength in emerging markets thanks to robust sales of iPhone. From education to the environment, we are continuing to advance our values, while championing innovation that enriches the lives of our customers and leaves the world better than we found it."
Apple's shares tanked in after-hours trading after the release of the report
Apple saw its revenue in the Americas decline by 6% to $35.38 billion. Sales also declined in Japan and the Rest of the Asian Pacific market by 11.5%, and 8.5% respectively. Revenue in Greater China rose 7.9% to $15.76 billion and sales rose in Europe by 4.8% to $20.21 billion.
Overall, Apple reported revenue of $81.80 billion for its fiscal third quarter which was down 1% on an annual basis but it still beat analysts' forecast for $80.69 billion in gross. It was the third consecutive quarter of lower year-over-year revenue for the first time since 2016. Net income of $19.88 billion exceeded last year's bottom line by 2.3%. Diluted earnings per share amounted to $1.26, a 5% rise over last year's $1.20 per share and topped estimates of $1.19.
Luca Maestri, Apple’s CFO, said, "Our June quarter year-over-year business performance improved from the March quarter, and our installed base of active devices reached an all-time high in every geographic segment. During the quarter, we generated very strong operating cash flow of $26 billion, returned over $24 billion to our shareholders, and continued to invest in our long-term growth plans." The increase in active devices bodes well for Apple's Services unit over the next few years.
During the regular trading session, Apple's shares were down $1.41 or .73% to $191.17. After the report was released, the stock declined another $2.10 or 1.1% to $189.07.
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