Apple's profit drops 22 per cent as iPad sales slow

But results were ahead of analyst expectations

Apple reported a drop in profits on roughly flat revenue for the April to June quarter, though the results were ahead of analysts' expectations, providing something of a silver lining for the company.

Revenue was $US35.3 billion, up 1 per cent from the same quarter in 2012, and profit was $US6.9 billion, down 22 per cent. Earnings were $US7.47, ahead of the $US7.32 expected by analysts, according to Thomson Reuters.

Within seconds of the results being announced, Apple's shares jumped in after-hours trading from $US419 per share to $US435.

The results weren't a surprise as Apple had already said it was expecting a weak quarter. Sales were down in part because the company didn't have an earnings-boosting big product launch in the quarter, and because it faces increasing competition from Android-based devices.

Sales of the iPhone hit 31.2 million during the quarter, a record for the period, according to Apple. But iPad sales were weaker, coming in at 14.6 million units, against 17 million in the same period of 2012. Sales of Mac computers were also down, from 4 million units to 3.8 million.

Gross margins on products were 36.9 per cent in the quarter, down from 42.8 per cent last year.

"We are especially proud of our record June quarter iPhone sales of over 31 million and the strong growth in revenue from iTunes, Software and Services," Tim Cook, Apple CEO, said in a statement.

Apple's earnings are closely watched by the IT and investing community, and only partly because of the results. Just as important is the company's forecast for the current quarter, which in this case runs from July to September.

Apple said it expects revenue during the three-month period to be between $34 billion and $37 billion. In the fiscal fourth quarter of 2012 it had revenue of $36 billion. Gross margins are expected to remain steady with the third quarter reported Tuesday.

What investors really want to know is when they can expect more new products from Apple. On that, Cook was typically guarded.

"We are really excited about the upcoming releases of iOS 7 and OS X Mavericks, and we are laser-focused and working hard on some amazing new products that we will introduce in the fall and across 2014," he said in the statement.

Martyn Williams covers mobile telecoms, Silicon Valley and general technology breaking news for The IDG News Service. Follow Martyn on Twitter at @martyn_williams. Martyn's e-mail address is martyn_williams@idg.com

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags smartphonesbusiness issuesApplefinancial resultshardware systemsconsumer electronicslaptopsdesktop pcs

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Martyn Williams

IDG News Service
Show Comments

Cool Tech

Toys for Boys

Family Friendly

Stocking Stuffer

SmartLens - Clip on Phone Camera Lens Set of 3

Learn more >

Christmas Gift Guide

Click for more ›

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Aysha Strobbe

Microsoft Office 365/HP Spectre x360

Microsoft Office continues to make a student’s life that little bit easier by offering reliable, easy to use, time-saving functionality, while continuing to develop new features that further enhance what is already a formidable collection of applications

Michael Hargreaves

Microsoft Office 365/Dell XPS 15 2-in-1

I’d recommend a Dell XPS 15 2-in-1 and the new Windows 10 to anyone who needs to get serious work done (before you kick back on your couch with your favourite Netflix show.)

Maryellen Rose George

Brother PT-P750W

It’s useful for office tasks as well as pragmatic labelling of equipment and storage – just don’t get too excited and label everything in sight!

Cathy Giles

Brother MFC-L8900CDW

The Brother MFC-L8900CDW is an absolute stand out. I struggle to fault it.

Luke Hill

MSI GT75 TITAN

I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Featured Content

Product Launch Showcase

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?