Apple Tumbles After IPhone Sales Miss, China Drops 29%, , on October 29, 2020 at 10:03 pm

By ILP
On 10/29/2020
In Financial News
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(Bloomberg) — Apple Inc. shares fell more than 5% after the company reported iPhone sales that missed Wall Street estimates and said revenue in China slumped.The company gave no forecast for the key holiday quarter, disappointing some analysts who were hoping for guidance. However, Chief Executive Officer Tim Cook said the new iPhone 12 line has been well received. Sales of Macs and Services also reached all-time highs in the fiscal fourth quarter.The Cupertino, California-based technology giant on Thursday said sales in the three months ending Sept. 26 came in at $64.7 billion. That beat analysts’ estimates of $63.5 billion, according to data compiled by Bloomberg. Earnings came in a 73 cents a share, also topping Wall Street expectations.Sales of the iPhone fell 21% on anticipation of the new models, which arrived later than usual this year. Cook said the response to the 5G iPhone lineup and other new devices has been “tremendously positive.”Read more: Apple IPhone 12 5G Line Wins Praise for Lower Prices, New SizesIn Greater China, one of the company’s most important regions, revenue fell 29% to $7.9 billion, the lowest since 2014. Products beyond the iPhone grew double digits in China, Luca Maestri, Apple’s chief financial officer, said in an interview with Bloomberg Television. He expects the iPhone 12 Pro Max with its larger screen to do “incredibly well” in the region and that the company is confident about growing there in the December quarter.Apple shares declined 5.3% to $109.25 in extended trading, after closing at $115.32 in New York. The stock has surged 57% this year and expectations were high ahead of Thursday’s results. “Apple capped off a fiscal year defined by innovation in the face of adversity with a September quarter record, led by all-time records for Mac and Services,” Cook said.The world’s largest technology company didn’t provide guidance again due to the ongoing impact of Covid-19, with Maestri citing the uncertainty from rising cases in the U.S. and Europe. The holiday quarter is usually Apple’s most important. This year, it includes the release of the iPhone 12 lineup, a new iPad Air, a cheaper HomePod and Macs with Apple’s own processors.Maestri said Apple is optimistic about the iPhone’s performance, saying that the new line has the “tailwind of 5G, which is a once-in-a-decade opportunity.”Fiscal fourth-quarter revenue from the iPhone was $26.4 billion. Wall Street expected $27.1 billion. The iPad brought in $6.8 billion, beating estimates of $6.1 billion, while Mac sales totaled $9 billion, ahead of Wall Street forecasts of $8 billion.The pandemic has forced millions of people to work and study from home, spurring demand for Apple devices. But the health crisis has also disrupted the company’s global supply chain.“Our outstanding September quarter performance concludes a remarkable fiscal year, where we established new all-time records for revenue, earnings per share, and free cash flow, in spite of an extremely volatile and challenging macro environment,” said Maestri said in a prepared statement.New iPhones often come out in September, giving Apple’s fiscal fourth-quarter a boost. This year, the iPhone 12 and iPhone 12 Pro went on sale last week, while the iPhone 12 mini and the iPhone 12 Pro Max become available for pre-order next week.That left Apple relying on other new products in the September quarter, including a couple of weeks of sales of the Apple Watch Series 6 and a lower-end iPad. The company also saw continued iPhone sales from the cheaper iPhone SE launched earlier this year, the newest iPad Pro and existing Macs.Services, which includes the App Store, Apple Music and iCloud, generated sales of $14.5 billion, up from $12.5 billion a year ago and higher than Wall Street expectations of $13.9 billion. The services result was spurred by records for music streaming, cloud storage, AppleCare product support and the App Store, Maestri told Bloomberg TV.That segment might get another boost in the current quarter when the company launches Apple One subscription bundles and a new Fitness+ service. Maestri said the bundles will launch on Friday and that the fitness service will debut this quarter.Apple’s Wearables, Home and Other Products category, one of the firm’s fastest-growing segments that includes the Apple Watch and AirPods, brought in $7.9 billion in revenue. That beat Wall Street predictions of $7.4 billion.(Updates with context on analysts’ expectations in second paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.,

Apple Tumbles After IPhone Sales Miss, China Drops 29%(Bloomberg) — Apple Inc. shares fell more than 5% after the company reported iPhone sales that missed Wall Street estimates and said revenue in China slumped.The company gave no forecast for the key holiday quarter, disappointing some analysts who were hoping for guidance. However, Chief Executive Officer Tim Cook said the new iPhone 12 line has been well received. Sales of Macs and Services also reached all-time highs in the fiscal fourth quarter.The Cupertino, California-based technology giant on Thursday said sales in the three months ending Sept. 26 came in at $64.7 billion. That beat analysts’ estimates of $63.5 billion, according to data compiled by Bloomberg. Earnings came in a 73 cents a share, also topping Wall Street expectations.Sales of the iPhone fell 21% on anticipation of the new models, which arrived later than usual this year. Cook said the response to the 5G iPhone lineup and other new devices has been “tremendously positive.”Read more: Apple IPhone 12 5G Line Wins Praise for Lower Prices, New SizesIn Greater China, one of the company’s most important regions, revenue fell 29% to $7.9 billion, the lowest since 2014. Products beyond the iPhone grew double digits in China, Luca Maestri, Apple’s chief financial officer, said in an interview with Bloomberg Television. He expects the iPhone 12 Pro Max with its larger screen to do “incredibly well” in the region and that the company is confident about growing there in the December quarter.Apple shares declined 5.3% to $109.25 in extended trading, after closing at $115.32 in New York. The stock has surged 57% this year and expectations were high ahead of Thursday’s results. “Apple capped off a fiscal year defined by innovation in the face of adversity with a September quarter record, led by all-time records for Mac and Services,” Cook said.The world’s largest technology company didn’t provide guidance again due to the ongoing impact of Covid-19, with Maestri citing the uncertainty from rising cases in the U.S. and Europe. The holiday quarter is usually Apple’s most important. This year, it includes the release of the iPhone 12 lineup, a new iPad Air, a cheaper HomePod and Macs with Apple’s own processors.Maestri said Apple is optimistic about the iPhone’s performance, saying that the new line has the “tailwind of 5G, which is a once-in-a-decade opportunity.”Fiscal fourth-quarter revenue from the iPhone was $26.4 billion. Wall Street expected $27.1 billion. The iPad brought in $6.8 billion, beating estimates of $6.1 billion, while Mac sales totaled $9 billion, ahead of Wall Street forecasts of $8 billion.The pandemic has forced millions of people to work and study from home, spurring demand for Apple devices. But the health crisis has also disrupted the company’s global supply chain.“Our outstanding September quarter performance concludes a remarkable fiscal year, where we established new all-time records for revenue, earnings per share, and free cash flow, in spite of an extremely volatile and challenging macro environment,” said Maestri said in a prepared statement.New iPhones often come out in September, giving Apple’s fiscal fourth-quarter a boost. This year, the iPhone 12 and iPhone 12 Pro went on sale last week, while the iPhone 12 mini and the iPhone 12 Pro Max become available for pre-order next week.That left Apple relying on other new products in the September quarter, including a couple of weeks of sales of the Apple Watch Series 6 and a lower-end iPad. The company also saw continued iPhone sales from the cheaper iPhone SE launched earlier this year, the newest iPad Pro and existing Macs.Services, which includes the App Store, Apple Music and iCloud, generated sales of $14.5 billion, up from $12.5 billion a year ago and higher than Wall Street expectations of $13.9 billion. The services result was spurred by records for music streaming, cloud storage, AppleCare product support and the App Store, Maestri told Bloomberg TV.That segment might get another boost in the current quarter when the company launches Apple One subscription bundles and a new Fitness+ service. Maestri said the bundles will launch on Friday and that the fitness service will debut this quarter.Apple’s Wearables, Home and Other Products category, one of the firm’s fastest-growing segments that includes the Apple Watch and AirPods, brought in $7.9 billion in revenue. That beat Wall Street predictions of $7.4 billion.(Updates with context on analysts’ expectations in second paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

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