Apple Inc shares fell 4 percent after the company on Thursday reported iPhone sales that missed Wall Street estimates and said that revenue in China slumped.
The company gave no forecast for the key holiday quarter, disappointing some analysts who were hoping for guidance.
However, CEO Tim Cook said that the new iPhone 12 line has been well received.
Photo: AFP
Sales of Macs and services also reached all-time highs in the fiscal fourth quarter.
The Cupertino, California-based technology giant said that sales in the three months ending on Sept. 26 came in at US$64.7 billion. That beat analysts’ estimates of US$63.5 billion, according to data compiled by Bloomberg.
Earnings were 73 cents per share, also topping Wall Street expectations.
Sales of the iPhone fell 21 percent on anticipation of the new models, which arrived later than usual this year.
Cook said that the response to the 5G iPhone lineup and other new devices has been “tremendously positive.”
In Greater China, one of the company’s most important regions, revenue fell 29 percent to US$7.9 billion, the lowest since 2014.
Products beyond the iPhone grew double digits in China, Apple chief financial officer Luca Maestri said in an interview with Bloomberg Television.
He expects the iPhone 12 Pro Max with its larger screen to do “incredibly well” in the region and that the company is confident about growing there in the December quarter.
Apple shares declined 4 percent to US$110.68 in extended trading, after closing at US$115.32 in New York. The stock has surged 57 percent this year and expectations were high ahead of Thursday’s results.
“Apple capped off a fiscal year defined by innovation in the face of adversity with a September quarter record, led by all-time records for Mac and services,” Cook said.
The world’s largest technology company did not provide guidance again due to the ongoing effects of COVID-19, with Maestri citing the uncertainty from rising cases in the US and Europe.
The holiday quarter is usually Apple’s most important. This year, it includes the release of the iPhone 12 lineup, a new iPad Air, a cheaper HomePod and Macs with Apple’s own processors.
On a conference call with analysts, Apple said that the iPhone, other major hardware and services would generate double-digit growth this quarter.
Maestri is optimistic about the iPhone’s performance, saying that the new line has the “tailwind of 5G, which is a once-in-a-decade opportunity.”
Cook added that Apple is entering 5G at the right time, with carriers improving and expanding their networks on a weekly basis.
He also said that 5G networks are “fairly advanced” in China, which could help sales during this period.
Fiscal fourth-quarter revenue from the iPhone was US$26.4 billion. Wall Street expected US$27.1 billion. The iPad brought in US$6.8 billion, beating estimates of US$6.1 billion, while Mac sales totaled US$9 billion, ahead of Wall Street forecasts of US$8 billion.
The pandemic has forced millions of people to work and study from home, spurring demand for Apple devices, but the health crisis has also disrupted the company’s global supply chain.
“Our outstanding September quarter performance concludes a remarkable fiscal year, where we established new all-time records for revenue, earnings per share and free cash flow, in spite of an extremely volatile and challenging macro environment,” Maestri said in a prepared statement.
New iPhones often come out in September, giving Apple’s fiscal fourth-quarter a boost. This year, the iPhone 12 and iPhone 12 Pro went on sale last week, while the iPhone 12 mini and the iPhone 12 Pro Max are to be available for preorder next week.
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