Wednesday, July 25, 2012

Apple's third-quarter earnings below Wall Street estimates

Apple sold a record 17 million iPads last quarter, but lower-than-expected numbers for the iPhone meant that the company's earnings fell below Wall Street estimates.

The third quarter, which ended on June 30, saw Apple chalk up total revenues of US$35 billion, an increase from the US$28.57 billion recorded for the same time period last year. Profits also went up from US$7.31 billion to US$8.8 billion. While these numbers beat the company's own forecast, it was below Wall Street's estimate of US$37.2 billion.

The biggest contributor to Apple's revenue remains the iPhone with 26 million units sold. This figure, however, was lower than the 29 million expected by Wall Street. Apple attributed this to a tough economy in developed regions such as North America, Europe and Australia. iPhone sales were also lower in China, which Apple's CEO Tim Cook said was due to "seasonal lag" after a successful iPhone 4S launch.

This was tempered by the record quarter achieved by the iPad, which at 17 million in sales, broke the previous high of 15.43 million. It also represented an impressive 84 percent increase from the previous quarter and includes sales of the latest iPad.

Meanwhile, Apple sold 4 million Mac computers, which is slightly below estimates of 4.1 million. The company's desktop line suffered the biggest decline with 18 percent lower revenue, while its notebooks increased slightly by 4 percent. Since Apple's latest refresh of its computers (to the Ivy Bridge platform) happened near the end of the quarter, we should only see any impact from that in the next quarter.

Apple's other main product line, the iPod, continued its downward slide, dropping 10 percent compared with the same quarter a year ago. The company shifted 6.8 million units of its portable media player.

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