Apple’s (NASDAQ:AAPL) iPhone shipments for the fiscal third quarter and the company’s revenue forecast for the current period lagged behind analysts’ projections. Shares tumbled.
Apple expects revenue of $49 billion to $51 billion in its current quarter ending in September, the Cupertino, California-based company said in a statement yesterday. That missed the $51.1 billion expected by analysts polled by Capital IQ.
Apple sold 47.5 million iPhones, a 35 percent rise, in the fiscal third quarter that ended in June, the company said. Analysts had anticipated 48.8 million shipments.
The third quarter is typically the slowest for iPhone sales because many customers put off buying new phones, on the expectation of a new model.
Any indication of slowing demand for iPhones could spark concern that Apple is going to have a hard time selling more smartphones in the final months of the year, after the September debut of the latest version fueled record profits.
The iPhone 6 and 6 Plus, which smashed iPhone sales records when they were launched last year, are now 10 months old. A new model is expected to be released later this year.
The iPad, meanwhile, shipped 10.9 million units, compared to 13.3 million in the year-ago period.
Only one of the 16 brokerages that issued reports assessing Apple's earnings cut its rating on the stock. Of the rest, 11 kept their "buy" or equivalent rating and four a "hold".
Shares fell 5.2 percent to $123.92 at 9:49 a.m. in New York, paring this year’s gain to 12.3 percent.
Still, chief executive officer Tim Cook said on the earnings call that the company was "proud" of its results, especially given a "challenging" foreign exchange environment. He also highlighted growth in China, and said Apple is going "pedal to the metal" there despite some worries about a recent drop in its equities markets.
Cook called the iPhone 6 is a runaway success, and that the product category is continuing to gain significant market share. On the call, he said that the phone's growth was triple the rate of the smartphone market overall.
"We sold more units than we thought we would," he said of the iPhone on the call. "We did exceptionally well in any way that you look at it."
The company posted fiscal third-quarter earnings per share of $1.85, above market expectations of $1.81 per share.
The gross margin was 39.7 percent, topping the company’s outlook for 38.5 percent to 39.5 percent.
Mac shipments climbed 8.7 percent to 4.8 million, matching projections.
Apple did not disclose shipments of Apple Watch, raising a red flag among some analysts that the device is not selling as well as Apple hoped.