Apple Q3 Results, Better Than Expectations?

On Tuesday, after the market had closed, Apple posted their Q3 financial results. The company posted a net income of $8.8 billion on revenue of $35 billion, with earnings of $9.32 per share. When compared to the same quarter, last year, where the company had posted a net income of $7.3 billion on revenue of $28.6 billion, with $7.79 per share, the gross margin increased to 42.8 percent from 41.7 percent.

Although these figures have surpassed Apple’s estimate, it did not however manage to meet the expectations of the trade industry.

Now let’s talk about the sales of some of the flagship products in the last quarter. The Cupertino-based company sold 26 million iPhones in the quarter, a 28 percent increase, when compared to the same quarter last year, but a 26 percent decrease from the previous quarter. With a record sales of 17 million units, iPad headlined sales this quarter, which is a 84 percent increase from last year and 44 percent increase from the last quarter. The products that showed lowest improvement in sales this quarter were Macs, with just a two percent increase over the last year, at 4 million and iPods with 6.8 million units, a 10 percent decrease compared to last year.

Of the total revenue generated by Apple products, 46% came from the sales of iPhone and 26% from the sales of iPad. When it came to sales, the expectation of Wall Street from Apple was – 29 million units of iPhone, 16 million units of iPad, 4.1 million units of Mac and 5.9 million units of iPod.

With the financial results, Apple had also announced $2.65 dividend on each share, which will be payable on August 16, 2012, to stockholders of record as of the close of business on August 13, 2012.

“We’re thrilled with record sales of 17 million iPads in the June quarter,” said Tim Cook, Apple’s CEO. “We’ve also just updated the entire MacBook line, will release Mountain Lion tomorrow and will be launching iOS 6 this Fall. We are also really looking forward to the amazing new products we’ve got in the pipeline.”

The decrease in the sales of iPhone from the last quarter, is being blamed on the rumors of the new iPhone / iPhone 5 as a result of which most of the consumers are holding back their purchase of the device, awaiting the latest edition of the iPhone which is rumored to be launched in October this year. Tim Cook has virtually confirmed the rumor stating that new devices would only be launched in the last quarter of this year.

Even though the company had posted a profit and had declared dividend, the share prices of Apple had fallen 5% to $570.81 in after-hour tradings simply owing to the fact that they have not met the expected numbers of the Silicon valley.
Well now surely a lot would depend on the launch of the iPhone 5 as a lot of prospective consumers are clearly waiting for its launch. And it doesn’t help that Samsung would have a full quarter clear for itself to make headway in the smartphone market and garner further share aggressively.

Apple for the first time seems to be on the back foot as they seem to be in a position to lose steady market share till the launch of the new iPhone or even a probable 7-8 inch iPad. It would be interesting to see how Apple tackles the situation. Perhaps an early release of the iOS 6 would help soothe some current users and encourage others to cross over.

So what do you think of the Q3 results, has Apple fallen short of expectations or is it doing fine? Do let us know your thoughts in comments below.

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