Apple’s December quarter results were a little better than expected after the dramatic warning of January 2, but the company’s outlook for the current March three month period fell short of market forecasts with a possible shortfall in revenue of up to $US6 billion.
Apple CEO Tim Cook had warned at the start of January that China was no longer doing well for Apple and the latest report confirmed that – Greater China accounted for $US13.2 billion in revenue during the holiday quarter, compared with $US18 billion in the December quarter of 2017.
The tech giant reported earnings of $US20 billion, or $US4.18 a share in the quarter one cent better than the consensus forecasts from Wall Street analysts.
That compares to $US20.1 billion or $US3.89 a share in the same quarter of 2017. The improvement in earnings per share reflects the reduction in the number of shares on issue thanks to the continuing buyback by Apple.
Total revenue hit $US84.3 billion, which was about $US300 million ahead of analysts’ estimates and the company’s own forecast, but it was well short of the $US88.3 billion recorded in the same period a year ago (Thanks to the slide in China).
The shares rose 3.5% in after-hours trading. That was after a 1% fall in regular trading.
Revenue from the key iPhones reached almost $US52 billion, which was a touch lower than analysts estimates and down from the $US61.6 billion a year ago – a measure of the extent of the drop in demand for iPhones.
Services revenue of $US10.9 billion topped forecasts and was much higher than the $US8.5 billion of the same quarter a year ago. Gross margins in the segment topped 62% in the quarter, well above the company’s overall gross profit margin of 37%.
It’s no wonder CEO Tim Cook wants investors to focus on the growth prospects for the iCloud, App Store, Apple Music, TV, and other services.
Looking at the current quarter, Apple’s forecast fell short of what the market thinks.
Apple expects March-quarter revenue of $US55 billion to $US59 billion, while analysts had forecast revenues of $US59 billion.
Both forecasts are well short of the $US61.1 billion in revenue for the March 2018 quarter (which was a solid rise of 16% from the same quarter in 2017).
