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CAPE FEAR MEMORIAL BRIDGE CLOSURE: UPDATES, RESOURCES, AND CONTEXT

Wrong Number: Apple Disappoints Market With Sluggish iPhone Sales

Apple reported lower-than-expected third-quarter revenues, numbers partly blamed on slower iPhone sales.
Paul Sakuma
/
AP
Apple reported lower-than-expected third-quarter revenues, numbers partly blamed on slower iPhone sales.

A spike in iPad demand wasn't enough to offset slower iPhone sales in the third quarter as Apple Inc. reported lower-than-expected revenues, sending its after-hours stock price on a 5 percent dive.

The company announced third-quarter revenue of $35 billion, or $9.32 per share; earlier, Bloomberg had projected $37.22 billion, or 10.37 per share.

It's only the second time since 2003 that Apple's profit and sales failed to meet projections, Bloomberg reported.

Apple saidits quarterly net profit rose to $8.8 billion, or $9.32 per share, compared with a net profit of $7.3 billion, or $7.79 per diluted share, in the same quarter a year ago. Its revenue in that quarter was $28.6 billion.

The numbers were blamed on sluggish sales of the iPhone, Apple's No. 1 revenue source. The company sold 26 million iPhones; that was 28 percent higher than during the same quarter last year, but analysts surveyed by Bloomberg had expected sales of 28.4 million units.

Customers, anticipating a new model of the iPhone this fall, appeared to be holding off buying the existing model.

"Every quarter that Apple isn't launching a new iPhone it's a transition quarter," Brian Marshall, an analyst at ISI Group, told Bloomberg. "That's the key product that matters."

Sales of the iPad tablet, meanwhile, spiked 84 percent compared with a year earlier. Apple sold 17 million iPads, compared with the 15.4 million expected.

Bloomberg also reported:

"Looking ahead to the current quarter, Apple forecast revenue of about $34 billion and profit of $7.65 a share. That compares with predictions by analysts for sales of $38 billion and profit of $10.27 a share."

After what was a bruising day for most of the market because of concerns about the European economy, Apple's stock price dropped by more than 5 percent, to $570 a share, after hours.

Still, on a year-on-year basis, profits were up around 20 percent, as Matthew Yglesias wrote on Slate.

He adds:

"The interesting thing is that one month ago, Apple had a price:earnings ratio of 14 which is exactly what you would expect from a company deemed to be in good shape but not poised for any breakthrough earnings growth. Yet 20 percent was disappointing. Market psychology is a curious beast."

Copyright 2021 NPR. To see more, visit https://www.npr.org.

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Krishnadev Calamur is NPR's deputy Washington editor. In this role, he helps oversee planning of the Washington desk's news coverage. He also edits NPR's Supreme Court coverage. Previously, Calamur was an editor and staff writer at The Atlantic. This is his second stint at NPR, having previously worked on NPR's website from 2008-15. Calamur received an M.A. in journalism from the University of Missouri.