Investors bite into Apple as iPhone sales surge 36pc
Published 28/10/2015 | 02:30
Shares in Apple shot up 3pc after market trading on the back of its announcement that sales increased by almost $10bn in the three months to the end of September.
Sales have increased by at least 20pc in each of the past four quarter-year financial reporting periods.
Apple's quarterly revenue rose 22.3pc in the three months to September as sales of iPhones jumped 36pc.
Overall sales rose to $51.50bn from $42.12bn in the quarter. The world's largest company by market value said yesterday that it sold about 48 million iPhones in the three-month period.
Chief executive officer Tim Cook is banking on China to add new customers. Last quarter, the company generated $12.5bn in revenue in the region, including Taiwan and Hong Kong,
However, heading into the crucial Christmas holiday season Apple's quarterly sales forecast for the rest of the year fell short of some analysts' estimates, showing there may be a limit to the growth it can squeeze out of the iPhone.
Fiscal first-quarter sales will be $75.5bn to $77.5bn, Apple said yesterday in a statement.
Analysts on average projected $77.1bn, according to data compiled by Bloomberg. While revenue will be up at least slightly from a year earlier, growth is far below last year's 30pc jump during the holiday rush.
Apple's sheer size means growth is becoming tougher to achieve. As iPad tablet sales decline and adoption of Apple Watch remains modest, the company's expansion has become increasingly dependent on demand for new iPhones.
After the long-anticipated debut of bigger-screen handsets in 2014, sales reached a record 74 million units during the holiday quarter last year, leading investors to question how much higher sales can go.
"The law of large numbers is working against them as they get bigger," said Alex Gauna, an analyst at JPM Securities, who recommends buying the stock. "It gets harder to show growth."
Apple included its holiday outlook in results for the fiscal fourth quarter, which ended on September 26. For that period, the company posted net income of $11.1bn, or $1.96 a share, while sales rose 22pc to $51.5bn, beating analysts predictions of earnings of $1.88 a share on sales of $51bn.
The company had $205.7bn in cash and investments on its balance sheet at the end of the quarter. Gross margin, a measure of profitability, widened to 39.9pc.
Success largely hinges on the iPhone. The company sold 48 million handsets last quarter, up 22pc from a year earlier and shy of analysts' average prediction of 48.5 million shipments.
Apple's smartphone generated sales of $32.2bn, making it bigger in its own right that Microsoft and Facebook's quarterly businesses combined. Introduced on September 25, the iPhone 6S and 6S Plus have improved cameras, faster processors and new 3D Touch screens.
Smartphone sales helped make up for falling iPad demand. Shipments of the tablet fell 20pc to 9.88 million units, the seventh straight decline.
Apple didn't break out unit sales for Apple Watch, but analysts estimated it sold 3.8 million in the quarter. Sales of higher-cost Mac products rose to 5.71 million. For 2015 as a whole, Apple sales were $233.7bn. Net income grew 35pc to $53.4bn for the year. (Bloomberg, additional reporting Reuters)