Apple Sales Take a Dive in Fourth Quarter

November 1, 2016 @ 6:09 pm

Apple

Apple Inc reported another decline in sales during its fiscal fourth quarter, hurt by the lackluster results from iPhone 6S, Macs and iPad sales.

The American tech company said revenue in the quarter slumped to $46.9 billion, down about 9 percent from a year earlier. The figure was virtually in line with expectations of analysts polled by Thomson Reuters.

It was the third quarter in a row that Apple has reported a decline in revenue, year-on-year. The Wall Street Journal reports that it was the first full-year top and bottom lines slide since 2001.

For the third quarter, Apple had reported $42.4 billion in revenue, down from $49.61 billion a year earlier. Revenue for the second quarter was $50.56 billion, sliding from $58.01 billion during comparable period a year earlier.

Earnings also declined for the third consecutive quarter, although they slightly exceeded expectations. The iPhone maker posted profit of $9 billion, or $1.67 per share, down 19 percent from $11.1 billion, or $1.96 a share, a year ago. In spite of the slump, earnings managed to exceed a Thomson Reuter analyst consensus estimate of $1.66 a share.

Apple, which has risen over the past years to become one of the world’s most valuable, wraps up a rather disappointing fiscal year, during which it had to endure subdued sales of its iPhone 6S. It has been especially hurt by slowing growth in its current biggest market, China.

Sales in greater China, including Hong Kong and Taiwan, slumped 30 percent to $8.8 billion in the fourth quarter. Sales to the region had jumped 99 percent during comparable period a year ago.

The tech giant said it sold expectation-beating 45.5 million units of the iPhone during the quarter. Analysts had expected shipped units to come in at around 44.8 million. However, the sales figure was about 2.5 million less than the level reported in the same period a year ago.

The iPhone still accounted for 63 percent of Apple revenue during the fiscal year despite the slump in sales. And the company is optimistic of better performance in the new fiscal year as a result of increased demand for the latest iPhone 7.

“We couldn’t be more excited about the customer response to the iPhone 7 and the iPhone 7 Plus,” Chief Executive Officer Tim Cook said.

The iPhone 7, which went on sale just a week before the end of the fiscal fourth quarter, is enjoying strong demand at the moment – way beyond what Apple appear to had expected. Cook said consumer response to the latest iPhone “has really been off the charts,” with waits especially for the company’s biggest smartphone iPhone 7 Plus.

An independent analyst, Neil Cybart, said consumers are on an eight-week wait for some iPhone 7 models, according to the Wall Street Journal.

The sales of iPhone 7 has also benefitted immensely from massive recall of rival Samsung Galaxy Note 7 due to safety concerns.

Apple iPad sales were flat during the quarter, while sales of Mac computers dipped 17 percent from a year ago. Sales of “other products” declined 22 percent. However, revenue from Apple Music climbed 22 percent.

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