Apple sells fewer iPhones than expected, sees China weakness

Apple announced solid revenue numbers Tuesday, but also reported troubling iPhone growth numbers that point toward larger sales declines in the current quarter.

Apple, however, remains profitable, posting a rise in first-quarter net profit of 1.9 per cent to $US18.36 billion, while revenue rose 1.7 per cent to $US75.87 billion, both records.

As might be expected, Apple CEO Tim Cook focused on the positive: “Our team delivered Apple’s biggest quarter ever, thanks to the world’s most innovative products and all-time record sales of iPhone, Apple Watch and Apple TV”, Cook said in a statement.

Breaking out individual products isn’t a problem for most tech companies – Samsung gives out sales numbers when it feels like it and Amazon hasn’t found a number besides revenue that it likes since it was founded – but most companies haven’t sold products like Apple has over the years.

Apple’s shares, which have fallen 5 percent this year, were up 0.4 percent at $100.42 in volatile after-hours trading.

The California technology colossus said it expects to see its first decline in iPhone sales in the current quarter, when it will be compared to three months of blockbuster sales in the same period previous year.

Mr Maestri partly blamed the strong USA dollar for Apple’s flat sales, estimating it had knocked $5bn off the company’s revenues.

$215.7 billion in cash, with over 90 percent now sitting outside the US.

Apple is forecasting revenue of between $US50 billion and $US53 billion for the March quarter, which would be the first quarterly drop since 2003 according to Bloomberg, and below analysts’ forecasts for $US55.5 billion.

Earnings for the just-completed quarter were $3.28 per share, compared with $3.06 a year ago. Customers, he said, report being very satisfied with Apple products.

Apple will likely make significant changes in the next major iPhone release, expected in September, which could fuel another surge in sales. Those results fell below expectations of analysts surveyed by Thomson Reuters, who had forecast $3.23 a share on sales of $76.6 billion.

According to analysts, Apple only has itself to blame.

In Apple’s Q1 ’16 “Earnings Supplemental Material” – documentation added to today’s earnings primarily to highlight how foreign exchange rates are impacting revenue – there was another notable figure revealed: Apple says now its “active” install base has reached 1 billion devices.

The iPhone maker’s gross margin was 40.1%, higher than the 39.9% in the year-ago quarter. Apple also expanded Apple Watch availability to more than 48 countries ahead of the holiday season.

Apple suppliers have been cutting production of iPhone components left and right, citing weaker demand.

The rub, however, is that jittery investors, pounded by a wobbly market and squishy global IT spending forecasts, are anxious how iPhone 6S and 6S Plus sales will hold up in the first half of 2016. Other products in the category include Beats accessories, Apple Pay and Apple TV.