Apple Shares Decline After iPhone Sales Miss, China Drops 29%

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  • Bloomberg QuickTake: Now published this video item, entitled “Apple Shares Decline After iPhone Sales Miss, China Drops 29%” – below is their description.

    Apple Inc. shares fell as much as 5.6% Friday after the company reported iPhone sales that missed Wall Street estimates and said revenue in China slumped. The company gave no forecast for the key holiday quarter, disappointing some analysts who were hoping for guidance. However, Chief Executive Officer Tim Cook said the new iPhone 12 line has been well received. Sales of Macs and Services also reached all-time highs in the fiscal fourth quarter. The Cupertino, California-based technology giant on Thursday said sales in the three months ending Sept. 26 came in at $64.7 billion. That beat analysts’ estimates of $63.5 billion, according to data compiled by Bloomberg. Earnings were 73 cents a share, also topping Wall Street expectations. Sales of the iPhone fell 21% on anticipation of the new models, which arrived later than usual this year. Cook said the response to the 5G iPhone lineup and other new devices has been “tremendously positive.” In Greater China, one of the company’s most important regions, revenue fell 29% to $7.9 billion, the lowest since 2014. Products beyond the iPhone grew double digits in China, Luca Maestri, Apple’s chief financial officer, said in an interview with Bloomberg Television. He expects the iPhone 12 Pro Max with its larger screen to do “incredibly well” in the region and that the company is confident about growing there in the December quarter. The stock, which had gained 57% this year before earnings were released late Thursday, tumbled to a low of $108.85. The company is valued at $1.8 trillion. “Apple capped off a fiscal year defined by innovation in the face of adversity with a September quarter record, led by all-time records for Mac and Services,” Cook said. The world’s largest technology company didn’t provide guidance again due to the ongoing impact of Covid-19, with Maestri citing the uncertainty from rising cases in the U.S. and Europe. The holiday quarter is usually Apple’s most important. This year, it includes the release of the iPhone 12 lineup, a new iPad Air, a cheaper HomePod and Macs with Apple’s own processors. On a conference call with analysts, Apple said the iPhone, other major hardware and services will generate double-digit growth in the current quarter. Maestri is optimistic about the iPhone’s performance, saying that the new line has the “tailwind of 5G, which is a once-in-a-decade opportunity.” Cook added that Apple is entering 5G at the right time, with carriers improving and expanding their networks on a weekly basis. He also said 5G networks are “fairly advanced” in China, which could help sales during the current period. Fiscal fourth-quarter revenue from the iPhone was $26.4 billion. Wall Street expected $27.1 billion. The iPad brought in $6.8 billion, beating estimates of $6.1 billion, while Mac sales totaled $9 billion, ahead of Wall Street forecasts of $8 billion. The pandemic has forced millions of people to work and study from home, spurring demand for Apple devices. But the health crisis has also disrupted the company’s global supply chain. “Our outstanding September quarter performance concludes a remarkable fiscal year, where we established new all-time records for revenue, earnings per share, and free cash flow, in spite of an extremely volatile and challenging macro environment,” Maestri said in a prepared statement. New iPhones often come out in September, giving Apple’s fiscal fourth-quarter a boost. This year, the iPhone 12 and iPhone 12 Pro went on sale last week, while the iPhone 12 mini and the iPhone 12 Pro Max become available for pre-order next week. That left Apple relying on other new products in the September quarter, including a couple of weeks of sales of the Apple Watch Series 6 and a lower-end iPad. The company also saw continued iPhone sales from the cheaper iPhone SE launched earlier this year, the newest iPad Pro and existing Macs. Services, which includes the App Store, Apple Music and iCloud, generated sales of $14.5 billion, up from $12.5 billion a year ago and higher than Wall Street expectations of $13.9 billion. The services result was spurred by records for music streaming, cloud storage, AppleCare product support and the App Store, Maestri told Bloomberg TV. That segment might get another boost in the current quarter when the company launches Apple One subscription bundles and a new Fitness+ service. Maestri said the bundles will launch on Friday and that the fitness service will debut this quarter.

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    In This Story: Apple Inc

    Apple Inc. is an American multinational technology company headquartered in Cupertino, California. It is considered one of the Big Tech technology companies, alongside Amazon, Google, Microsoft, and Facebook.

    Well known products and services from the brand include the iPad tablet computer, AirPods wireless earbuds, iOS, iTunes, the Safari web browser, Apple Music, iCloud and Apple Pay.

    Apple was founded by Steve Jobs, Steve Wozniak, and Ronald Wayne in April 1976. Apple went public in 1980. In August 2018, Apple became the first publicly traded U.S. company to be valued at over $1 trillion and just two years later in August 2020 became the first $2 trillion U.S. company.

    The company employs 137,000 full-time employees and maintains 510 retail stores in 25 countries as of 2020.

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  • In This Story: Tim Cook

    Timothy Donald Cook is the chief executive officer of Apple Inc., and previously served as the company’s chief operating officer under its cofounder Steve Jobs.

    Cook joined Apple in March 1998 and was made the chief executive on August 24, 2011, prior to Jobs’ death in October of that year.

    Since 2011 when he took over Apple, to 2020, Cook doubled the company’s revenue and profit, and increased its market value from $348 billion to $1.9 trillion.

    In 2014, Cook became the first chief executive of a Fortune 500 company to publicly come out as gay. Cook also serves on the boards of directors of Nike, Inc., the National Football Foundation, and is a trustee of Duke University. In March 2015, he said he planned to donate his entire stock fortune to charity.

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