Shares in tech giant Apple jumped initially in after hours trading after the company revealed earnings results for the first quarter of this financial year that came in ahead of analysts’ expectations. Earnings per share hit $3.28, beating forecasts of $3.23, while revenue was $75.9bn (£52.9bn).
However revenue failed to meet projections, with the rate of growth for iPhone sales at the slowest it’s ever been - and the Silicon Valley firm has predicted that sales will fall in the current quarter, marking its first revenue decline since 2003, down to $50-$53bn from $58bn last year.
Profits hit a quarterly record of $18.4bn, up from $18bn.
And although the $75.9bn revenue was at a record high, it was expected to come in at around $76.6bn. Revenue was also at the lower end of Apple's guidance of between $75.5bn and $77.5bn.
Sales of iPhones grew by 0.4 per cent, the lowest rate of growth since the device was launched in 2007. Around 74.78m iPhones were sold, against analysts’ projections of 75m.
The iPad saw sales of 16.1m against projections of 17.3m, and 5.3m Macs were sold in the period, against analysts’ expectations of 5.8m.
Meanwhile, numbers for the Apple Watch, which launched in April last year, are still being wrapped into the “other products” category, which reported a 62 per cent increase in revenue year-on-year. However chief executive Tim Cook said sales of the Apple Watch hit a new quarterly record in the first quarter.
Why it's interesting
Investors had feared that revenues would be down due to poor sales following the launch of the iPhone 6 and the iPhone 6s and the Apple Watch, and this crucial set of results was foreshadowed by weak sales figures from a number of Apple suppliers.
Reports of a cut in Apple production at the start of the year sent shares tumbling under $100 for the first time since 2014. Investors did not take kindly to reports that the Silicon Valley firm was expected to cut production of both of the latest iPhone models, the 6s and the 6s Plus, by 30 per cent in the first quarter of 2016.
What Apple said
Tim Cook, Apple’s chief exec, said: "Our team delivered Apple’s biggest quarter ever, thanks to the world’s most innovative products and all-time record sales of iPhone, Apple Watch and Apple TV."
Apple CFO Luca Maestri added: "Our record sales and strong margins drove all-time records for net income and EPS in spite of a very difficult macroeconomic environment."
Investor concerns over iPhone sales have been borne out in these results, and the world's biggest brand has delivered a bombshell with its prediction of a revenue decline.