RESULTS - Apple Inc on Tuesday posted stronger-than-expected quarterly profit and revenue, boosted by a jump in iPhone sales to 31.2 million — a record for the June quarter.
Quarterly gross margin in Apple’s third-quarter fell to 36.9 percent from 42.8 percent in the year-ago period.
Shares jumped 4 percent on the news in trading after the bell.
“We like it. You got to love that 31.2 million iPhone number. The market’s absorbing the September quarter guidance, you’ve got to make it to the product refresh cycle.
“You may not like the revenue guidance. But with Apple, when they roll out a new phone, demand dries up for the existing one. So that’s not a huge surprise.
“And you got to like the fact that they’re able to maintain 37 percent gross margin.”
“I thought it was a decent report — the fact they beat estimates was a good thing. And iPhone sales were higher than expected so that’s good. I was disappointed in iPad sales. By region, the U.S. was up and the rest of the world was down. It could be some indication the rest of the world’s economies may not be doing so well.”
“The iPhone number should provide some comfort to investors who were worried about smart phone demand. That’s one of the reasons the stock is up. Expectations were not strong for this quarter.
“There’s a mix shift to the lower end because the ASP was down. Some of the weakness in ASP is likely because of the yen. They sell a lot of iPhones in yen, and there was depreciation of that currency in the quarter. That probably knocked several dollars off the ASP.
Macs were weak. People are waiting for the Intel Haswell chip refresh. These processors are coming out soon, and there was probably some channel clearing going on in the quarter. iPad was weaker than expected, which was a little concerning... People may be starting to anticipate a refresh. The tablet thesis may be weakening too. It may not be that PC demand is falling, it may be that the consumer is weak.”
MICHAEL YOSHIKAMI, CEO OF DESTINATION WEALTH (owns Apple shares):
“I think that the numbers are probably better than many people expected, given the fact that many people had such little positive perspective on apple at this point.”
“Margins continue to shrink which I think is to be expected as the cell phone business becomes more mature. And as usual, Apple is pretty conservative on their guidance going forward.
“Given the fact that we have no new product essentially in this quarter, and that we a product release coming next quarter most likely, I’m actually pretty pleased with these results.
“It’s pretty remarkable that they are selling as many phones as they are, given that it’s not new product. That’s really the key for them, is they’ve got to come up with a new product.”
STEPHEN MASSOCCA, MANAGING DIRECTOR, WEDBUSH EQUITY MANAGEMENT LLC, SAN FRANCISCO:
“It appears to be better than expected. $35 billion in revenue in the quarter — those are good numbers. Mac shipments were a little light as were iPod shipments; iPhone shipments though were much better than expected.
The iPhone number was very, very good.
“It’s nice to see a bit of a beat for a change. Earnings are still down year over year. I think it’s going to take a new product introduction before we see earnings turn positive. It’s a step in the right in the direction with low expectations. The iPhone (numbers) were great — a few more million than people expected.”
“This was a blah quarter and the story hasn’t changed. Investors are looking for a big catalyst to propel it back into being a strong-growth stock. Until it delivers a new innovative product that really adds to both top and bottom-line, I would expect the stock to continue treading water. They beat expectations, but investors want to see where organic growth comes from.”
Reporting by Ryan Vlastelica,; Caroline Valetkevitch, Alexei Oreskovic, Alistair Barr,; Jennifer Saba; editing by Edward Tobin