Apple sees Q3 revenue fall 15%, net income down 27%, but the numbers beat guidance
iPad sales again fell, but because of the new iPad Pro, sales revenue grew in the category for the first time in 10 quarters; Twitter revenue up 20%, but investors wanted more (apparently)
For quarter and after quarter, Apple would release its earnings and the first impression one would have after seeing the numbers would be WOW! You’re freaking kidding me. Yep, another record quarter.
But then, one would go to a financial or tech website and the story was different. Apple stock down in after-hours trading because some analyst had predicted that Apple would sell a trillion iPhones and make 10 Sexillion in profit.
In other words, it was a miss.
My oh my, how times have changed.
Today, Apple reported its third quarter earnings (its financial year starts in October), and it reported that revenue was down 15 percent, net income down 27 percent. It’s press release for the earnings report is the shortest I can remember. WOW!
Then go to the financial and tech websites.
“Apple needed a breakout quarter after its last whiff, and boy did it get one,” writes Matthew Lynley of TechCrunch.
In other words, a make! Beat forecasts.
Whatever they are taking over at tech websites… I want some!
Then there is Twitter.
They reported their second quarter earnings at about the same time as Apple released their report. Revenue totaled $602 million, an increase of 20 percent year-over-year.
OK, you know what comes next, here comes the tech press.
Recode: “Twitter still has revenue problems, and its stock is down big,” their headline stated. “Twitter missed Wall Street’s revenue estimates. Again,” read the subhead.
Of course, what follows is all about expectations, and I get it. People take those forecasts and analysts seriously, for some reason.
Twitter added 3 million new monthly active users last quarter, which is a good number, but Twitter is not the star that Apple is. No one gets invited to product launches, for instance.
TNM, since 2010, has concentrated on iPad sales, because their tablet sales were always thought to be vital to the growth of digital edition app sales. But iPad sales have been down for now for 10 quarters in a row, and few of the major publishers in the US take their digital editions very seriously (sadly).
But this quarter was probably their best for the iPad in quite some time. Unit sales were down 9 percent, yes, but revenue was actually up 7 percent. The reason, of course, is that Apple introduced a new model of the iPad Pro, its highest price unit.
But Apple touted not the iPad (in fact, they said very little at all), but instead bragged about its services.
“Our Services business grew 19 percent year-over-year and App Store revenue was the highest ever, as our installed base continued to grow and transacting customers hit an all-time record,” said Luca Maestri, Apple’s CFO.
I think this is a sign of a maturing business, one dependent on wringing out the last possible dollars it can from its customers. Not a good sign, especially since the focus was supposed to be on the Apple Watch or the Apple TV. But that category, which also includes the iPod, saw revenue fall 16 percent.
OK, that means Apple is doomed, right? No, I’m not an Apple-is-doomed follower. I may be furious at the company for what it is doing to publishers, its disregard for the media that is not the select few on its list.
But, come on. We’re may looking at a company whose net income fell, but how much profit did the company make? $7.8 billion. Wow!
OK, I think they will be fine, don’t you think?