Apple's quarterly profit leapt 38% to $10.7bn on surging iPhone sales
San Francisco - Arab Today
Apple's latest quarterly profit leapt as people around the world snapped up big-screen iPhones but its shares slipped as analysts had expected even more.
The US tech giants reported Tuesday that its profit jumped 38 percent to $10.7 billion on surging iPhone sales, compared to $7.7 billion in the same period last year.
Nevertheless, Apple shares fell sharply in after hours trading, at one point down around eight percent as traders noticed lower than expected sales forecasts.
"We had an amazing quarter," chief executive Tim Cook insisted, noting that iPhone revenue in the quarter that ended on June 27 was up 59 percent from the same period a year earlier.
Analysts had expected Apple to sell even more iPhones and were looking for a brighter forecast than was given for the current quarter.
Apple shares dropped more than six percent to $122.41 in after-market trades that followed release of the earnings figures.
Sales of iPhones have been powering Apple profits, and any hint of a plateau spooks investors.
Apple sold 47.5 million iPhones in the quarter, with sales up 85 percent in Greater China where the company's overall revenue more that doubled to $13 billion, accord to chief financial officer Luca Maestri.
- iPhone shines in China -
Big gains in China came despite stock market woes there.
"We remain extremely bullish on China and we are continuing to invest," Cook said, remaining confident that China is poised to be Apple's biggest market at some point in the future.
"We would be foolish to change our plans. I think China is a fantastic geography with an incredible, unprecedented level of opportunity."
He brushed aside any worry about iPhone sales growth, expressing confidence it has 'lots of legs' that it will be running with for many years to come given market factors such customer satisfaction rates and the booming overall global smartphone market.
"It is an incredible market," Cook said.
"I think everyone is going to own a smartphone, and we can compete for a fair number of them."
Apple did not detail specifics on sales of its newly-launched smartwatch, instead folding the figure into an "other" category that rose 49 percent to $2.64 billion
Cook said during an earnings call that sales of iPhone, iPad, Apple Watch and Macintosh computers "topped internal expectations."
Nearly three months after the launch of Apple's fashionably smart wrist wear, some analysts say it's not a mainstream hit.
But others see promise in its popularity with Internet-savvy younger people.
A recent study by research firm Slice Intelligence suggested that, based on a large sampling of email receipts in the United States, orders for Apple Watch have plunged since the week that the wearable computing gadget made its debut.
The estimate did not factor in data about Apple Watch sales at real-world stores.
However, Cantor Fitzgerald experts believe Apple Watch will be a "go-to gift" during the year-end holiday season and become the best selling new product in Apple's history.
Apple Watch was the first new product line introduced by the culture-changing company behind iPhone, iPad, iPod, and Macintosh computers since 2010.
Global Equities Research managing director Trip Chowdhry has estimated Apple could sell 20 million to 25 million of the watches in the final three months of this year.
"We are convinced the watch is going to be one of the top gifts of the holiday season," Cook said, while fielding questions from analysts on the earnings call.
"I never go anywhere without the watch; not because I am the CEO but it's because I am attached to it. And, I know a lot of people who feel the same way."
He said Apple decided from the outset to remain mum about smartwatch shipments to avoid providing insights to competitors but that the company feels "really great" about sales and how it is position for the long-term.
"The investors may have gotten a little ahead of themselves," Forrester analyst Frank Gillett said of Apple profit soaring but shares dipping.
"Forget the Wall Street guys. This is an amazing performance."