Apple earnings on the upper end of estimates, but forecast is still bleak
Apple has published its third-quarter figures for fiscal year 2016 and, like last quarter, they are not good.
It made $42.4 billion in sales revenue, a 15 percent decline year-on-year. The number is on the upper end of Apple’s target range and about what Wall Street expected. Expenses were up, but on the lower end of expectations. Still, operating income crashed by more than 28 percent to $10.1 billion. Net income was down a similar proportion to just under $7.8 billion.
Product sales slipped again compared to 2015 in most categories. 40.4 million iPhones went out the door, down 15 percent in units. The introduction of the lower-priced iPhone SE partly meant that revenues were lower by 23 percent. iPad sales shrunk by 9 percent to 9.95 million, but thanks to brisk take-up of the Pro lineup, the price premiums drove revenue up 7 percent. Mac sales slid to 4.25 million and revenue sunk 13 percent.
CEO Tim Cook was bright on the iPad Pro charge saying that “stronger customer demand and business performance” were pleasant surprises. He also called the launch of the iPhone SE “successful.”
Service revenues rose 19 percent from last year to $5.98 billion, the best year-on improvement to date. Other products — which include Apple TV, Apple Watch, Beats wares, iPods and third-party accessory licensing — raked in $2.22 billion, a 16 percent slump.
Eyes are on the next quarter now, — the quarter that will likely see the launch of the next iPhone, but not holiday sales — but even Apple’s vision is pointed well downward. Revenue estimates for Q4 compared to last year are down 7 percent, with the floor amount at $45.5 billion and a ceiling of $47.5 billion. Expenses will only inch up marginally between quarters, but represent a 3 percent annual rise.
As the numbers are marginally better than what analysts have predicted, Apple shares rocketed up by 7 percent in after-hours trading.