Apple Earnings Beat Estimates But iPhone Sales Lag

The March quarter is likely to be the weakest this year in terms of iPhone sales for the company, which forecast on Tuesday its first quarterly revenue drop in 13 years. While now the most valuable publicly traded USA tech company, the decline put it closer to Alphabet Inc, which ended the day worth roughly $486.5 billion.

Shares fell to $95.97 at open, knocking off almost $20 billion from Apple’s market value of about $554 billion. Overall, the company reported revenue of $75.9bn (£53.04bn) and net quarterly profit of $18.4bn (£12.86bn).

Apple’s stock, trading at US$94.67, was the biggest drag on the S&P 500 and the Nasdaq, and was set for its biggest fall since August.

The total number of iPhones sold in Q1 2016 was reported to be 74,78 million, iPad sales declined 21 percent from 2015, with 16.1 million sold this quarter and Mac sales were down three percent from a year ago, to 5.31 million.

If you are going to buy Apple stock now, it better be for the right reasons, said Aswath Damodaran, finance professor at the Stern School of Business at New York University.

That would be its slowest growth ever and far from the double-digit growth that investors have come to expect. The sales in iPhones last quarter grew only one percent over the 74.5 million iPhones sold in the same time period the year prior. (MSFT) But with around $200 billion in cash, Apple could keep paying dividends for the next 25 years and not feel the pain, he said.

While the next iPhone could help Apple improve this year’s sales figures, he added, “I don’t think anyone’s expecting the return to hyper-growth that Apple saw in 2015”.

He looked ahead to the release of the next iteration of the iPhone: “Ultimately, it comes down to iPhone 7”.

As expected, Apple announced on Tuesday that growth in the sale of iPhones has slowed significantly.

This year, the company’s “S” models failed to generate as much consumer excitement as the iPhone 6 and iPhone 6 Plus did in 2014, as they were the first Apple smartphones to feature a display larger than the traditional iPhone’s four-inch screen.