Apple Announces Record Earnings For Quarter One

Apple is used to being the overachieving popular kid in Silicon Valley, but the iPhone maker is about to face its most hard quarter since the first iPhone was announced, after the company forecast a decline in sales. “Even with a new model due this fall, the impact of iPhone growth is tapering over time, and placeholder products like Apple TV and Apple Watch, while growing, aren’t making up for slowing sales of more important products”. An analyst at Mizuho Securities USA, Abhey Lamba said “they have other products, and have the potential to launch other products, but the hole left from an iPhone slowdown is too big to fill”.

Gross profit margins rose by two percentage points, to almost 40 percent, compared to the last three months of 2014, indicating that profits were boosted by factors other than sales, such as higher prices or lower production costs.

Apple reported that revenue in China grew to a record $18.4 billion.

The Silicon Valley giant admitted that sales of its iPhones had missed expectations after it sold 74.8 million iPhones in the quarter, falling short of the 75.46 million target.

The company also saw massive growth from sales of its gadgets in China previous year. Net profit was $18.4 billion, up from $18 billion a year earlier.

Financial analysts surveyed by Thomson Reuters had estimated that Apple would report earnings of $3.23 per share for the quarter on revenue of $76.6 billion, according to a January 26 report by The Wall Street Journal.

Sales of iPad tablets fell to 16.12 million from 21.42 million, while Mac sales slipped to 5.31 million from 5.52 million.

Apple said earnings for another quarter will be between $50bn (GBP 34bn; Euro 46bn) and $53bn, below the $58bn it reported for the exact same period a year ago.

“The growth of our services business accelerated during the quarter to produce record results”. This category includes Apple TV, Beats products, iPods and accessories for Apple devices as well as the Watch, though, so it’s hard to draw any firm conclusions. Sales of iPhone reached 74.8 million units, in line with the analysts’ estimated sales of 75 million.