Apple Inc painted a rosy picture for the new iPhones as it reported quarterly results on Tuesday, but investors were focussed on the next evaluation of the company’s: topping last year’s record holiday sales.
Shares of the world’s most prosperous business initially climbed 3 percent in extended trade after Apple beat beat Wall Street’s sales and profit forecasts, but the gains mostly evaporated afterwards.
Apple CEO Tim Cook introduces the new iPhone 6 and iPhone 6 Plus (R) during an Apple event at the Flint Center in Cupertino, California, September 9, 2014. REUTERS
In the world’s most important marketplace for smartphones, Apple’s revenues in Greater China in its fourth financial quarter nearly doubled from this past year to $12.52 billion, accounting for almost a quarter of its total revenue.
“We continue to get amazing success there,” Apple’s chief financial officer, Luca Maestri, told Reuters, adding that Apple now has 25 shops in China and is opening a fresh one about monthly.
But China sales dipped from the fiscal third quarter, when Apple notched $13.2 billion in revenue there. The consecutive decline is essential as many analysts believe China is poised to replace the United States as the largest market of Apple.
Analyst Ben Bajarin of Creative Strategies said as the Chinese market develops, it is beginning to show spikes round the holidays and recessions ahead of the release of a new cellphone, as in the U.S. market. “The seasonality in China is actually a brand new wrinkle,” he said.
Apple, the planet ‘s largest company by market value, said it sold about 48.05 million iPhones global in its fiscal fourth quarter ended September 26, marginally below analysts’ average forecast of 48.72 million, according to a survey by Fortune magazine.
For the present quarter, that will add the full three months of revenues of the brand-new iPhone 6s and 6s Plus versions, Apple outlook revenue between $75.5 billion and $77.5 billion. The company’s normally conservative outlook was in line with Wall Street’s average estimate of $77.17 billion, according to Thomson Reuters one/B/E/S.
“The street was dreading soft guidance and instead got a great December outlook,” said Daniel Ives, an analyst at FBR Capital Markets.
Morningstar analyst Brian Colello said the outlook was somewhat below expectations but investors were pricing in a worse outcome, which was why after hours grew.
Boosted by a new pink or ‘rose gold’ colour alternative, Apple posted record sales iPhones in the very first weekend that they hit stores. The financial fourth quarter comprised only two days of sales of the recent iPhones.
The launch of the iPhone 6 set off a sales frenzy this past year, propelling Apple to the most lucrative quarter ever for a U.S. business.
Analyst Shannon Cross of Cross Research said the guidance for the current quarter of Apple suggested a year ago, the business can top its success. “It indicates they’re definitely up to the endeavor,” she said.
But anxieties were expressed by some analysts.
Apple’s net income climbed to $11.12 billion, or $1.96 per share, in the fourth quarter, up from $8.47 billion, or $1.42 per share, a year earlier.
Net sales climbed about 22 percent to $51.50 billion.