Apple beats revenue and earnings estimates, iPhone sales up 22%, iPad sales down 20%
Twitter beats revenue forecasts, but user numbers and guidance are less than investors would have likes and so the company’s stock is taking a hit in after-hours trading
The world’s sometimes largest corporation, Apple announced its fourth quarter and year-end earnings after the bell today (July-Sept. is Q4 for Apple).
But before Apple’s earnings came out Twitter reported its numbers and they were quite good – revenue came in at $569 million compared to the $559.6 million expected by analysts. But people look at Twitter a bit differently. But the forecast for Q4 revenue was lower than many analysts expected, as were the user numbers (320 million, which sounds good to me), so the stock has gotten hit in after-hours trading – down over 10 percent in the first few minutes following the release of earnings.
Apple, meanwhile, blew out its revenue and earnings numbers. Expectations were high for iPhone sales, and they grew by 22 percent – but and for once Apple didn’t quite hit the mark as far as those silly analysts were concerned: 48.05 million units versus analyst expectations of 48.5 million. (Lesson: don’t listen to the analysts.)
“Fiscal 2015 was Apple’s most successful year ever, with revenue growing 28% to nearly $234 billion. This continued success is the result of our commitment to making the best, most innovative products on earth, and it’s a testament to the tremendous execution by our teams,” said Apple CEO Tim Cook. “We are heading into the holidays with our strongest product lineup yet, including iPhone 6s and iPhone 6s Plus, Apple Watch with an expanded lineup of cases and bands, the new iPad Pro and the all-new Apple TV which begins shipping this week.”
iPad sales, which TNM has tracked since 2010, came in at 9.88 million, versus 12.32 million a year ago – a drop of 19.8 percent, and the seventh straight quarter where sales failed to equal or exceed the comparison quarter.
Falling iPad sales continue to be very bad news for those who have invested in the tablet platform. But for investors, Apple continues to be one very, very profitable company. With this report Apple said its gross margins are at 39.9 percent (versus expectations of 39.3 percent), so if you think Apple products are priced to produce a huge profit, well, you are right.
Wall Street is looking at the earnings and revenue numbers and likes what they see, driving Apple stock up in after-hours trading. And why not? Compared to many other firms Apple has been reliably beating its numbers. With Apple hitting a total of over $53 billion in net income for its fiscal 2015 year, it means the company now makes $1 billion a week in profit. It also has $206 billion in cash (maybe they could afford to hire someone to fix the Magazines & Newspaper part of the App Store… please, maybe one day?).
Next month Apple will launch its newest model of the iPad, the iPad Pro. Sales estimates are modest, and unlikely to help Apple beat its Q1 holiday season sales from 2014 of 21.4 million (Apple sold 26.0 million iPads during the holiday season of 2013, the year it introduced a retina display version of the iPad mini).