Apple delivers strong profits, but investors punish shares

Apple on Thursday delivered blockbuster earnings, but saw shares punished after a disappointing holiday season forecast and word that it will stop reporting how many iPhones it sells.

The California-based technology giant makes most of its money from iPhones, and sales numbers have been seen as a bellwether of the company’s fortunes.

Apple shares dove 6.5 percent to $207.78 in after-market trades following the release of earnings figures for a record-setting September quarter.

The firm said net profit climbed 32 percent to $14.13 billion on revenue that was up 20 percent to $62.9 billion with help from growing sales of digital content and services to users and other Apple gadgetry.

“We’re thrilled to report another record-breaking quarter that caps a tremendous fiscal 2018, the year in which we shipped our two billionth iOS device, celebrated the 10th anniversary of the App Store and achieved the strongest revenue and earnings in Apple’s history,” said chief executive Tim Cook.

However, the market was disappointed that Apple fell short of expectations with sales of 46.9 million iPhones and a forecast for the key holiday season that was not as robust as anticipated.

The average sale price for the latest iPhones was $793, indicating that Apple was able to deliver more of its priciest handsets.

Apple offered no detailed breakdown of iPhone sales, but Cook said “the response has been powerful” to the new 10S models that sell for $1,000 and up.

Apple executives said that from now on, its earnings reports would no longer specify numbers of iPhones or other products sold. Instead it would focus on revenue, margins and cost of sales.

Apple chief financial officer Luca Maestri told reporters on an earnings conference call that the change stemmed from an increasingly diverse product line.

“It doesn’t matter how many units there are in there when it comes to the full value of the shopping cart,” Cook said, adding that “customer loyalty” was a more important metric.

Revenue in the quarter ended September 29 grew double digits everywhere Apple does business around the world.

“We set September quarter revenue records for iPhone and wearables and all- time quarterly records for Services and Mac,” Maestri said.

The world’s most valuable company saw its stock market value briefly dip below a dizzying $1 trillion based on share price.

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This article has been posted by a News Hour Correspondent. For queries, please contact through [email protected]
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