Apple CEO Tim Cook characterized its earnings results as “very strong,” being near the high end of its forecast range for its fourth fiscal quarter.
It reported gross revenues of $46.85 billion, down approximately 9 percent from the year before, though up 11 percent sequentially. Operating income fell by 20 percent to $11.76 billion while net income declined 19 percent to $9.01 billion. Annual net revenue slid 10 percent to $84.26 billion — the first time in 15 years. Net income fell 14.5 percent to $45.69 billion.
- 45.5 million iPhones were sold, down 5 percent, with revenues totaling $28.2 billion, down 13 percent. There was an extra week in Apple’s fiscal quarter.
- iPad unit sales were down 6 percent to 9.27 million, but revenue was down by $21 million to $4.26 billion.
- Mac unit sales dropped 14 percent to 4.89 million. Revenue was down 17 percent to $5.74 billion.
- Services revenue rocketed 24 percent to $6.33 billion, an all-time quarterly record.
- Other revenue, which includes Apple TV, Apple Watch, Beats, iPod and accessories, sunk 22 percent to $2.37 billion.
CFO Luca Maestri saw growth in the Japan and Latin America markets while Cook was looking forward to the propagation of the Apple brand in India with a promotion with wireless IP upstart Reliance Jio. China is also still a developing target market with LTE still gaining gills and a middle class still growing.
Looking ahead to the full-bore holiday quarter, Apple is hoping that two new iPhones, a new Apple Watch and a new MacBook Pro will help it launch back to annual growth with revenue between $76 billion and $78 billion. After costs, that could be $28.9 billion and $30 billion.
One major stumbling block for the iPhone 7 going forward is supply constraints as analysts have been asking about if the company can stock the Plus model up to demand.
“On iPhone 7 we will, on iPhone 7 Plus, we aren’t sure,” Cook said. “I wouldn’t say for sure because the underlying demand for that product is extremely strong.”
Long shipping times could put a damper on that high-rolling iPhone 7 Plus. Add a volatile currency market and we could probably see where this forecast might be held by strings. Maybe the Note 7 factor might not be able to help? We shall see.