Apple Profits Up 31%, iPad Sales Slump 20% Mo News On Watch Sales
Apple is on a roll reporting 48.04 million iPhone sales and a profit rise of 31%, share in the Company climbed 3.1% on the news to US $118.10 in after hours trading.
The Company has not reported sales of their new Smart Watch while iPad sales have slumped 20%.
Net income rose to $11.2 billion, in the quarter that ended on Sept. 26, compared with $8.47 billion, a year earlier. Net sales rose to $51.5 billion, up 22% from a year earlier.
Analysts were expecting revenue of $51.1 billion, slightly higher than Apple’s own forecast of between $49 billion and $51 billion.
Apple said gross margins rose to 39.9%, from 38% a year earlier and topping forecasts of between 38.5% and 39.5%.
Booming iPhone sales have propelled the company in the last quarter however the Company is facing questions about whether it can maintain its sales momentum of the past year.
Apple Chief Executive Tim Cook said he expects iPhone sales to grow again in the current quarter. Some analysts have questioned whether Apple’s iPhone sales may dip in the current quarter compared with last year, when Apple sold a record 74.46 million iPhones.
“We’re pretty confident that we can grow this quarter despite having the mother of all comps,” Mr. Cook said in an interview with The Wall Street Journal.
Apple executives said that company sold 48.04 million iPhones, surpassing sales of 39.27 million units a year earlier. However, it fell short of analysts’ estimates of 48.72 million units in the quarter.
The September quarter included only two business days where Apple offered its most recent models, iPhone 6S and 6S Plus.
What’s clear is that the iPhone is the linchpin to Apple’s earnings. It accounted for nearly 63% of revenue in the quarter, and a greater portion of Apple’s profits.
Any slowdown to iPhone demand is a major concern for investors claim analysts.
Mr. Cook said there are still many iPhone consumers who haven’t upgraded to the larger-screen iPhone.
He says about two-thirds of iPhone’s customer base before the first batch of larger iPhones were introduced in 2014 haven’t upgraded to newer models.
Apple didn’t disclose sales for Apple Watch, its first all-new hardware product since 2010. Watch sales were included with the iPod, Apple TV and Beats accessories in the “other products” category.
Sales of Apple’s previous breakthrough hardware product, the iPad, continued to slump.
Apple’s tablet sales fell for a seventh straight quarter, down 20% in unit terms. The iPad and tablet computers, in general, are facing an existential problem-not as essential as the smartphone but not as functional as a notebook computer.
Apple aims to solve a few issues hampering iPad demand with a new larger-size iPad coming out next month.