Published: Mon, November 05, 2018
Money | By Wilma Wheeler

Apple delivers strong profits, but shares slip on outlook

Apple delivers strong profits, but shares slip on outlook

During the announcement of September quarter revenue, Cook was asked about the flat growth of iPhone sales in India and to that, Apple said it was facing a hard challenge over the Rupee depreciation but was optimistic that these are little speed bumps along a "very long journey" in India.

Despite a show-of-force performance in its fiscal fourth quarter, Apple's revenue forecast for the coming quarter was merely around Wall Street's previous average estimate.

Tim Cook says that giving details of unit sales is not helpful information as it does not give a clear view of how the company is actually performing. However, on a year-to-year basis, there was a 6% decrease in the number of iPads sold, from 10.3 million in the fourth quarter of 2017. Meanwhile, Apple's net income was $14.12 billion, nearly 32% up from Q4 of the financial 2017, a significant jump, considering Apple was already one of the most profitable companies in the world.

Revenue growth was up in all major markets, with Japan seeing the largest increase of 34 percent YoY.

Services revenue reached an all-time high of $10 billion.

Mac unit sales were 5.29 million, down 2 percent year-over-year.

Apple further reinforced the idea that sales of its biggest products may not continue to grow significantly when executives revealed the company will no longer divulge how many iPhones, Macs, and iPads it's selling each quarter. Instead, Apple will only make public revenue data.

The average iPhone selling price was US$793.

Apple's cautious forecast could accelerate investor fears that have in turn erased stock market gains for much of the year. With so many users within the Apple ecosystem, the company now has the opportunity to monetize more services, improve existing services, and add new ones like Apple's Search Ad business on the App Store.

"We were especially pleased with Mac momentum in emerging markets with strong growth in Latin America, India, West Asia and Africa, and Central and Eastern Europe", Apple's chief financial officer Luca Maestri said. Reuters reports that Apple shares have fallen by six percent following the release of the earnings report, knocking $67 billion off the company's total value.

The California-based company is also making more money from "services" such as the App store, Apple Music and Apple Pay. Apple's Services revenue increased to $10 billion during its fourth quarter, as well, a 27-percent increase over the same quarter a year ago. Analysts were quick to cut their price targets for Apple, but Bank of America Merrill Lynch was optimistic, giving the stock a "buy" rating.

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