Apple Profit Rises, IPhone Sales Misses; Outlook Below Expectations

Apple Inc. turned in another record quarter Tuesday, with December quarter revenues of $75.9 billion and record earnings of $18.4 billion, or earnings per share of $3.28.

Apple is expected to report sales of its iPhones increased by a little more than one percent in the final quarter of past year when it announces earnings later on Tueday.

The Mac is also slipping, from 5.5 million units sold last year to 5.3 million this year.

Apple reported that, overall, a billion iPhones, iPads, Macintosh computers, iPod touch devices Apple TV units, and Apple Watch wearable computers had “engaged” with its services in the past three months.

Maestri attributed the lackluster revenue to foreign exchange headwinds caused by the strong USA dollar, which he said knocked about $5 billion off the company’s revenue.

Apple also released guidance for its Q2 2016 results, predicting revenue between US$50 billion and US$53 billion (AU$72 billion and AU$75.3 billion), and gross margin between 39 and 39.5 percent for Q2 2016. Apple’s earnings call will begin at 5 p.m. Eastern time, and can be heard live on the company’s investor website.

The iPhone, however, is Apple’s biggest-selling product, contributing almost two-thirds of its revenue and a similar share of profit. While the money numbers were huge as we’ve come to expect, iPhone sales growth slowed, while other devices dropped year-over-year.

While iPad sales were up by 63% over the previous quarter – which isn’t entirely unexpected, given the boost provided by Black Friday and Christmas shopping – they fell spectacularly compared with fiscal Q1 2015, dropping by a massive 25% year-on-year.

Apple had another fantastic holiday quarter.

If Apple’s revenue over several iPhone cycles, then I might rethink my thesis.

The company’s revenue follows the same pattern.

Apple is unlikely too bothered, though, as it raked in $18bn in profit during the three-month period, the largest the profit largest ever recorded by a single public corporation.

But Apple said the decline is nothing more than a hiccup, and that it is working to broaden its product options.