Apple earnings: Profits soar as China continues to boost iPhone 6 sales - but share price slides seven per cent

 
Clara Guibourg
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Booming Iphone 6 sales are sure to put a smile on investors' faces (Source: Getty)

Despite beating analysts' sales and revenue expectations again, Apple share fell by seven per cent after the company reported selling fewer iPhones than forecast and lowered fourth quarter profit guidance.

The figures

Smashing through what is traditionally its slowest sales period, Apple has reported a quarterly record-high revenue of $49.6bn, beating analysts' forecasts for the ninth consecutive quarter.

Earnings per share came in at $1.85, above analysts' expectations of $1.81, and up 45 per cent from last quarter.

iPhone sales came in slightly lower than forecast, at 47.5m units, against analysts' projections as high as 50m, but this is still a 35 per cent rise against the same period last year.

Apple shares slid ahead of the earnings report, trading 1 per cent down at 130.76 at the bell. Over the year, the company has risen 40 per cent but shares have been largely flat over the past quarter, despite the launch of Apple Watch.

But Apple's warning that its revenues were likely to hit $49bn to $51bn in the fourth quarter sent shares down seven per cent.

Why it's interesting

This is the first set of results released since the company launched the Apple Watch. Although investors who were hoping for news were disappointed as Apple did not break out sales figures for it, finance chief Luca Maestri said tonight that sales units have "beat internal forecasts" - and the Watch has sold more than the Ipad or the Iphone in its first quarter. Apple has kept schtum about how the smartwatch has performed, and ahead of this earnings report there have been reports of disappointing sales for the smartwatch.

Read more: Four things to expect from Apple's earnings

Strong iPhone 6 sales have been powering Apple's growth, and although summer traditionally sees Apple's lowest sales, as everyone holds out for the new model, the company's revenue hit a quarterly record, with iPhone sales up 35 per cent compared to the same period last year. This growth failed to impress investors however, as sales of the flagship model just missed Wall Street's estimates, causing shares in the company to drop sharply directly after earnings were released.

What Apple said

Chief executive Tim Cook said:

We had an amazing quarter, with iPhone revenue up 59 per cent 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.

In short

With Chinese revenues soaring by 112 per cent to $13.2bn, booming growth in the region continues to boost Apple's sales and although the company has not broken out any hotly anticipated details on how the Apple Watch has fared, this has been another strong quarter for the tech giant.

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