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Apple Reports Record Profit, Misses On iPhone Sales

Apple Reports Record Profit, Misses On iPhone Sales

As expected, Apple has quite recently declared its first fiscal quarter results, and the most important piece of news was a disappointment for Wall Street.

Apple has just recently said it recorded $75.9 billion in revenue with quarterly net income of $18.4 billion, or $3.28 per share for first quarter, compared to last year’s $74.6 billion in revenue with net income of $18 billion, or earnings of $3.06 per share. Now, although this represents record quarter revenue for Apple, but somewhat under what analysts were looking for? Earnings of $3.23 per share were expected on revenue of $76.6 billion.

As everyone knows, Apple’s profit largely depends on iPhone sales. But this doesn’t look good when we take a look at the company’s recent quarterly earnings. Apple declared to have sold 74.8 million iPhones (which is just under the 75 million that analyst were expecting), 16.1 million iPads, and 5.3 million Macs, as compared to last year’s 74.5 million iPhones, 21.4 million iPads, and 5.5 million Macs. Although we have seen a minimal growth of 0.4 percent in iPhone sales (which really isn’t what Apple had in mind) but iPad sales were down by whopping 25 percent and Mac sales were down by 3.6 percent.

Foreign exchange rates kept on being an immense issue for the company, to such an extent that Apple particularly called it out in its income presentation. The company said that there would have been around $5 billion of difference in revenue. In fact, Apple CEO Tim Cook mentioned the challenges faced by global economy and along with these challenges, about 66% of the company revenue comes from outside the United States, making foreign exchange rates a major issue for Apple, Cook said.

A lot of great things happening in a turbulent environment. We’re experiencing severe conditions just about everywhere we look, major markets including Japan, Russia, Brazil,… have been impacted by slowing economic growth, falling commodity prices and weakening currency,” Cook said. “We have seen softness in China, especially in Hong Kong.

The quarter was expected to be a hugely important one for the company given how its stock has performed this year. In short, 2015 was not a very good one for Apple’s stock.

source: Apple, CNBC, WSJ, TechCrunch

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