Shareholders got some goodies from tech giant Apple in what was a generally disappointing March quarterly report (the company’s second for the financial year) this morning.
The shares sold off and to compensate for the generally weaker than expected report dividend was lifted, as was the company’s massive buy back program.
Apple’s iPhone sales fell short of forecasts, disappointing investors who had been confidently tipping a much higher figure in previews of the company’s March quarter report.
Apple said it sold 50.76 million iPhones in the first three months of this year, down almost 1% from the same quarter of 2016 — and below Wall Street forecasts for 51.4 million.
The drop in iPhone unit sales was offset by a 1% increase in revenues from phone sales, as average selling prices rose $US13 because of the increasing popularity of the larger 7 Plus model.
In an interview, Apple finance chief Luca Maestri said that the reported figure includes only handsets that were sold into the retail channel.
He said that on what he called a “sell through” basis that captures final sales to consumers, total sales were 52 million – around the level analysts were expecting for the quarter – because channel inventory was reduced by 1.2 million units.
“We are proud to report a strong March quarter, with revenue growth accelerating from the December quarter and continued robust demand for iPhone 7 Plus,” Tim Cook, Apple’s chief executive, said in this morning’s statement, noting “strong momentum” in its services business.
In addition to the fall in iPhone sales, iPads units were down nearly 13% from the period last year to 8.9 million. But Apple lifted Mac sales by 4% to 4.2 million.
Apple reported quarterly profit rose nearly 5% to $US11.03 billion in, on a 4.6% rise in revenue to $US52.90 billion, up 4.6%, a little below forecast for $US53.1 billion.
To compensate, the giant stepped up its buyback program and lifted dividend.
Apple increased the quarterly dividend by 10.5% and raise its share-repurchase authorisation to $US210 billion from $US175 billion.
And not helping investor sentiment was Apple’s forecast for revenues in the current quarter, at $US43.5 billion to $4US5.5 billion, below forecasts for $US45.7 billion.
Apple shares rose ahead of the result, but were down more than 2% in after hours trading because the figures fell short of market forecasts. But the shares at around $US147 each are close to an all time high.
The recent highs for Apple shares should be appreciated by the company’s most recent enthusiast, Warren Buffett’s Berkshire Hathaway.
