Apple Inc. shares fell about 4% after the company reported iPhone sales that missed Wall Street estimates and a drop in sales from China.
The company gave no forecast for the most important vacation quarter. However, Tim Cook, chief executive officer, said the new iPhone 12 line was well received. Mac and services sales hit all-time highs for the quarter, leading the record fourth quarter.
The Cupertino, Calif.-Based tech giant announced Thursday that fiscal fourth quarter revenue was a record $ 64.7 billion for the period. This exceeded analysts’ estimates of $ 63.5 billion, according to Bloomberg estimates. The result was 73 cents per share, exceeding Wall Street’s expectations.
Sales of the iPhone fell 21% in anticipation of the new models. Cook said the response to the 5G iPhone range and other new devices has been “hugely positive”.
In Greater China, one of the company’s key regions, sales fell 29% to $ 7.9 billion, the lowest level in several years. Products beyond the iPhone have seen double-digit growth in China, said Luca Maestri, Apple’s CFO, in an interview with Bloomberg Television. He added that he expects the iPhone 12 Pro Max, with its larger screen, to do “incredibly well” in the region and that the company is confident of growing there in the December quarter.
“Apple closed an adverse business year of innovation with a record in September, led by all-time records for Mac and services,” said Cook.
The world’s largest tech company did not issue further guidance due to the ongoing effects of Covid-19. Maestri pointed to the uncertainty caused by rising cases in the US and Europe. The vacation district is usually Apple’s most important. This year, the iPhone 12 lineup, a new iPad Air, a cheaper HomePod, and Macs with Apple’s own processors will be released.
According to Maestri, Apple is optimistic about the iPhone’s performance and says the new line has the “tailwind of 5G, which is a golden opportunity”.
Sales of the iPhone were $ 26.4 billion in the fourth quarter. Wall Street expected $ 27.1 billion. The iPad grossed $ 6.8 billion, beating estimates of $ 6.1 billion, while Mac sales were $ 9 billion, ahead of Wall Street’s projections of $ 8 billion.
The pandemic has forced millions of people to work from home and study, which is fueling demand for Apple devices. But the health crisis has also disrupted the company’s global supply chain.
“Our outstanding performance in the September quarter concluded a remarkable fiscal year in which we set new records for sales, earnings per share and free cash flow despite an extremely volatile and challenging macroeconomic environment,” said Maestri in a prepared environment statement.
New iPhones often come out in September, which gives Apple a boost in the fourth quarter. This year, the iPhone 12 and iPhone 12 Pro launched last week, while the iPhone 12 mini and iPhone 12 Pro Max are available for pre-order next week.
As a result, Apple relied on other new products in September, including a few weeks of selling the Apple Watch Series 6 and a lower-priced iPad. The company continued to see iPhone sales with the lower-priced iPhone SE launched earlier this year, the latest iPad Pro, and existing Macs.
Services, which include the App Store, Apple Music, and iCloud, achieved revenue of $ 14.5 billion, up from $ 12.5 billion a year earlier, exceeding Wall Street’s expectations of $ 13.9 billion -Dollar. The outcome of the services was spurred on by recordings for music streaming, cloud storage, AppleCare product support and the App Store, Maestri told Bloomberg TV.
That segment could get another boost in the current quarter if the company launches Apple One subscription packages and a new Fitness + service. Maestri said the bundles will start on Friday and that the fitness service will make its debut this quarter.
Apple’s Wearables, Home and Other Products category, one of the company’s fastest growing segments, which includes the Apple Watch and AirPods, had sales of $ 7.9 billion. This exceeded Wall Street’s forecast of $ 7.4 billion.