Apple reported its third-quarter financials in an earnings call yesterday, missing Wall Street's forecasts partly due to slowing demand from Europe and because of the continued speculation surrounding its next generation iPhone, as consumers wait for the new handset's arrival sometime later this year.
Revenue from the Asia-Pacific market grew by 25% to $5.7 billion, a 48% increase year-on-year with Greater China accounting for two-thirds of the total revenue for the region. This in spite of the new iPad just launching on Friday after settling the iPad name dispute in that country.
Apple reported revenues of $35 billion during the third quarter, missing analysts’ estimates of $37.2 billion. The firm’s net profits came to $8.8 billion, or $9.32 per share, short of industry analysts’ predictions of $10.32. Apple’s large stockpile of cash grew by another $7 billion to $117.2 billion during the three-month period.
“The sheen is off the apple: It was a miss, no question about it,” said David Rolfe, chief investment officer at Wedgewood Partners Inc., whilst pointing out that Apple has only failed to beat analyst estimates twice in the last ten years. “We became too confident, in our expectations, that Apple had literally a perfect pulse on end demand throughout the globe... and quite simply, that wasn't the case this quarter.”
The Cupertino-based firm sold 26 million iPhones during the three-month period ending June 30, a 28% increase year-on-year. iPad tablets sold just as well, with 17 million sold during the quarter, a massive 84% bump. Mac sales hit four million, a 2% increase year-on-year. The iPods didn’t fair so well with a 10% decline year-on-year to 6.8 million, and despite Tim Cook continuing to label the Apple TV a company's "hobby”, it sold 4 million units, more than doubling its year-on-year sales.
Apple blamed the current Eurozone instability with particularly sluggish sales in France, Greece and Italy as well as speculation surrounding the new iPhone as the main reasons for missing analyst predictions. That did little to help the firm on the stock exchange though, as shares dropped below $600 in after-hours trading.
Peter Oppenheimer, Apple’s chief financial officer also confirmed during the earnings call that the company’s latest desktop operating system OS X Mountain Lion will go on sale later today.