Apple Delivers Rare 3Q Miss on Lackluster iPhone Sales
Shares of Apple, Inc. (NASDAQ:AAPL) were moving lower in after-hours trading as the world’s largest company by market value reported a surprise fiscal third-quarter miss, as iPhone sales fell below expectations.
The company reported net income of $8.8 billion. or $9.32 a share, compared with year-ago profit of $7.31 billion. or $7.79 a share.
Revenue rose to $34 billion, up from $28.57 billion one year ago, as gross margin widened to 42.8% from 41.7%.
Analysts, according to Thomson Reuters data, had predicted earnings of $10.37 a share on revenue of $37.18 billion. The whisper number was $11.02 a share, according to WhisperNumber.com.
The results were a rare miss for a company that is known for handily beating the Street’s expectations. Sales of the iPhone were 28% higher at 26 million; the Street was watching iPhone sales closely and had expected the company to ship 29 million units during the quarter. The company is widely expected to release a new version of the popular device this fall.
Apple said iPad sales rose 84% during the quarter, and it shipped 17 million units of the device, beating the Street’s expectation for sales of between 14 and 15 million units. Mac unit sales came in at 4 million, in line with the Street’s expectations, while iPod sales fell to 6.8 million units, beating the Street’s view.
"We're thrilled with record sales of 17 million iPads in the June quarter," said Tim Cook, Apple's CEO, in a statement. "We've also just updated the entire MacBook line, will release Mountain Lion tomorrow and will be launching iOS 6 this Fall. We are also really looking forward to the amazing new products we've got in the pipeline."
The company forecast fiscal fourth-quarter revenue of about $34 billion and earnings of $7.65 a share, compared to analyst expectations for earnings of $10.22 a share on revenue of $38 billion. It also declared a dividend of $2.65 a share.
Apple’s stock fell $2.91, or half of 1%, ahead of the bell on Tuesday, following the broader market trend. The stock has been on a tear, gaining 48% since the beginning of the year. Shares were down 5.5% in after-hours trading.