Apple’s Shares Fall After Holiday Forecast Fails To Impress

Apple’s latest quarterly results exceeded expectations, including its iPhone revenue. However, this failed to stop a slide in their shares of 2% with analysts concerned about holiday sales.

Then, there is a looming European tax bill and a softening of China sales.

Apple claims total sales in the December period will only rise low-to-mid single digits, analysts had anticipated a 7 per cent increase.

Overall iPhone revenue grew 6 per cent to A$144.28 billion.

The sales of iPhones are always a significant indicator of the company’s overall performance as it accounts for  around 49% of its overall sales.

Apple reported A$22.39 billion in net income for the quarter, versus A$34.90 billion in the year-ago period.

In September, Apple lost  a court fight with the European Commission over Irish laws relating to tax payments.

The EU’s Court of Justice (ECJ) in Luxembourg ordered Apple to pay a A$21.55 billion tax bill.

Revenue rose about 2 per cent for the full fiscal year to A$594.31 billion.

Quarterly revenue in the September period was up 6 per cent. It now has cash reserves of A$238.08 billion.

Revenue in greater China fell to A$22.8 billion from a year earlier, the company said, this was was lower than analyst estimates of A$24.01 billion.

The company is facing increased competition from local brands in China such as Huawei.

The concerns weighed on the company’s shares in late trading, sending them down more than 1 per cent. However, the stock had been up around 17 per cent this year.

Apple’s iPad business had the strongest growth among all of its hardware lines with an 8 per cent increase in sales to A$10.56 billion as the company rolled out its M4 chip onto the iPad earlier this year.

It has also been introducing that chip, which will supports its Apple Intelligence features, to its Mac range.

Apple’s services business – which includes online subscriptions such as iCloud, Google search revenue, and AppleCare warranties for Apple hardware – grew 12 per cent on an annual basis to nearly A$38 billion in sales.

The company has just rolled out its Apple Intelligence features in some markets – Australia is set to receive it in December – and as it becomes more widely available globally, there could be a rise in demand for its products over the next quarter as some customers will necessarily need to upgrade their devices in order for their hardware to be compatible with the AI features.