Apple shares had jumped 22% in the three months to Monday’s close on Wall Street and this morning’s 4th quarter and full year figures from the tech giant confirmed why that rebound had happened (taking many investors by surprise).
The company talked a lot about the positive outlook with sales and earnings gains expected for the current quarter off the back of the iPhone7 model, although weak sales in China were a concern. As expected, Apple revealed its first fall in annual revenues for more than a decade as demand for the iPhone 6S failed to match its predecessor.
Sales for fiscal 2016 were down 8% to $US215.6 billion.
But investors at first didn’t like the reality of this morning’s release and the shares fell by just under 2% in after hours trading, taking some of the gleam off the boom of the past three or four months. But the shares were down 2.4% at one stage during the results release.
Some analysts think investors were confused about iPhone7 sales – the latest quarter only included two weeks figures and the full benefit from the new model comes (as usual) in the current quarter. The current quarter contains an extra week, which will add to the dollar amount and expected growth figure. But other analysts noted that sales in China were very weak (China actually was responsible for the overall sales drop) with a 30% slide to $US8.79 million.
Apple said it sold 45.5 million iPhones in the three months to September 24 (its 4th quarter), down 5% from a year ago but in line with market forecasts that were based on guidance from Apple in its third quarter release.
And, as expected, profits fell by 19% in the fiscal fourth quarter to $US9.0 billion.
For the December quarter, which is typically Apple’s most lucrative, the company is forecasting sales of $US76-7$US8 billion, at least 1% up on the same quarter in 2015-16, and the highest ever target from the company.
Analysts said that the company is also seeing strong growth in its services business, which includes the App Store and Apple Music.
Revenues from services increased 24% to $US6.3 billion in the September quarter, making it Apple’s second-largest source of income after the iPhone.
Mac sales were weak (the company has a Mac product day slated for tonight, our time, in the US).
