Apple Misses Wall St's Q3 Expectations
Speaking on the company's third-quarter earnings call, CEO Tim Cook stressed that Apple goes to extremes to keep its product roadmap as secret as possible, but it can't stop people from talking. This quarter, speculation about the next iPhone caused its current sales to slow in the third quarter. CFO Peter Oppenheimer called it "the fall transition" that's driving most of the decline in sales.
The company sold 26 million iPhones in the quarter, as well as a record 17 million iPads. The iPhone is now available on 200 carriers in 150 countries, and the iPad is sold in 97 countries.
Overall for the quarter, Apple earned $8.8 billion, or $9.32 a share, on revenues of $35 billion. A year earlier it reported a profit of $7.3 billion or $7.79 a share on revenues of $28.6 billion. Oppenheimer said it was the company's highest June quarter revenues yet, although it missed analyst's expectations.
Analysts polled by Thomson Reuters expected a profit of $10.36 a share on revenue of $37.2 billion. The company's shares fell by 5.5 percent to $567.80 in after-hours trading.
Apple expects to get back on course with this fall, and it's counting on the wireless operators to help promote its new device. When asked about the high price carriers are forced to pay to subsidize the iPhone, Cook said that the upfront cost is fairly small relative to the monthly fee operators collect during a 24-month contract. (See AT&T Sells 5.1M Smartphones in Q2 and Verizon CFO Is a Tease on iPhone Timing.)
And, he added, the iPhone exhibits lower churn rates than other devices and is ideal for the operators' new shared data plans as most iPhone owners also have an iPad. The iPhone is also amongst the most efficient users of data compared to its competitors, he said. (See Apple Won't Compromise, Cook Declares.)
"Generally, I would just say that our role is to make the very best smartphone in the world, and that has an incredible user experience, far superior than anything else, that customers want to use every day," Cook said. "At the end of the day, the carriers want to provide their customers with what their customers want to buy."
— Sarah Reedy, Senior Reporter, Light Reading Mobile