Apple’s earnings fell just shy of Wall Street’s expectations for third-quarter revenue despite continued strong sales of the iPhone 6, which helped the company bring in $49.6 billion in gross revenue and $10.7 billion in profit.
Perhaps even worse for AAPL, the company’s fourth-quarter revenue forecast fell short of analysts’ best guesstimates.
Even with the iPhone 6s announcement looming this fall, iPhone 6 revenue was up 59 percent over last year, thanks largely to strong demand in China. The official sales figures of the Apple Watch weren’t announced (as we expected they wouldn’t). Sales for the iPad were down but the Mac had another record-breaking quarter, which Apple CEO Tim Cook called “amazing.”
We had an amazing quarter, with iPhone revenue up 59 percent over last year, strong sales of Mac, all-time record revenue from services, driven by the App Store, and a great start for Apple Watch,” said Tim Cook. “The excitement for Apple Music has been incredible, and we’re looking forward to releasing iOS 9, OS X El Capitan and watchOS 2 to customers in the fall.”
Q3 is traditionally Apple’s slowest quarter of the year, but the company had a lot to be happy about heading into the fall quarter. Analysts expected Apple to bring in $50.61 billion of revenue, according to a Fortune survey. Apple’s own projection for the quarter was between $46 billion and $48 billion.
Apple sold 47.5 million iPhones in Q3, but Wall Street was expecting 48.8 million. iPad sales reached 10.9 million units, while 4.7 million Macs were sold. Gross margin was 39.7 percent compared to 39.4 percent in the year-ago quarter. Apple Watch sales weren’t disclosed, but the company’s “Other products” category saw a 49 percent increase from Q3 2014.
Apple’s guidance for Q4 revenue — which the company typically beats — came in between $49 billion and $51 billion, slightly less than the $51.1 billion average predicted by analysts in a survey by Thomson Reuters.
Buster Hein is a freelance writer who lives in Phoenix, Arizona. Twitter: @bst3r.
15 responses to “Apple earnings (and forecast) fall short of Wall Street estimates”
The article’s a little confusing, the title says “Apple earnings fall short of Wall Street estimates” but the photo caption says “Apple beat Wall Street’s expectations, again”. I’m assuming it’s the photo caption that’s mistaken?
You are correct. The placeholder photo caption was wrong. It has been fixed. Thanks for pointing out the error.
Any time!
lol which is it?
Why does Tim Cook call the quarter “amazing?” It clearly sucked. An amazing quarter doesn’t drive down the share price of a stock 8%. A lousy quarter like what IBM had didn’t drive down that stock as much as Apple got driven down. IBM only fell about 5%. I’m wondering if there’s something wrong with Tim Cook’s perception of what amazing means. It only goes to show Apple is less than Amazon and Google when it comes to being an investment. For a long-term Apple shareholder like myself, I’m not sweating it because I’ve got plenty of shares and I get my dividends. I only feel sorry for recent Apple investors who are getting screwed mightily. Carl Icahn made a huge mistake of dumping Netflix and holding Apple. He should have done the opposite. I’ll bet he regrets his decision.
Apple has so much money to work with and I’m clearly baffled why they can’t get better quarterly results with all that spare cash simply sitting around. Why can’t they put it to work in a useful manner like Amazon does.
Why didn’t you dump Apple and buy Netflix?
Also, why don’t investors ever hold analysts accountable for completely dropping the ball on their estimates? Did Apple fall short, or did analysts get it incredibly wrong? I vote for the latter.
Relax, after market trading is meaningless, unless you are trading in the after market. Apple stock has nowhere to go but down on news and IBM nowhere to go but up. A 38% increase in profit over last year is an astoundingly good quarter, considering it’s on top of $7.74 billion earned last year. If you really are a long-term investor (doubtful), ignore off mkt price movements, this is a home run report from every angle. The stock is up 35% this past year, with a 38% increase in earnings compared to last year…. hmmm, it’s like Financial Science or something. Better results?? Try day trading.
These guys are loony! Wall streets expectation for Apple was $50.61 billion in revenue. Apple made $49.6 billion, and we get this lower forecast crap. Makes no sense.
“Why can’t they put it to work in a useful manner like Amazon does.” Because, Amazon runs off of dreams, and Pixie Dust. No real profit. And the people that believe in the magic of that Pixie Dust keep throwing money into its stock.
As I said above, Wall Street has its head up its ass when it comes to Apple, the stock ALWAYS falls after a record breaking quarter, or any positive news at all. Dumb beyond belief…
Buster has it all wrong… the revenue, earnings, and margin all beat… the stock is trading down because of the projected revenue for Q4.
“Wall Street’s exceptions”
GET AN EDITOR.
Got one. Fixed. Thanks.
Getting closer Buster but neither revenue nor earnings posted below forecast this quarter. Actual rev & earnings = $49.6 & $10.7 vs. Projected $49 & $10.3.
Apple’s revenue forecast for the next quarter is between $49-$51 billion and the average analyst forecast is $51.3 billion. That’s the general idea why the stock sold off after-hours but no one really knows why and until the market actually opens, it’s meaningless.
Best June quarter ever… now hold > $200 billion in cash… amazing results across the board. When the mkt cap is > three quarter trillion bucks and is up 35% in 12 months, it doesn’t take much for people to sell and take some money out. The company has never been in a stronger position… no company has ever had a stronger balance sheet, ever.
Wall Street has its head up its ass when it comes to Apple, the stock ALWAYS falls after a record breaking quarter, or any positive news at all. Dumb beyond belief…