Apple reported a rise in quarterly profits but its shares took a hit from slow-growing revenues and weaker iPhone sales ahead of a 10-year- anniversary model on the horizon. Apple said that its profit climbed 4.9 per cent to slightly more than USD 11 billion on revenue rising 4.6 per cent to USD 52.9 billion in the quarterly that ended April 1.
Shares of the California-based company were down nearly two per cent to USD 144.79 in after-market trades that followed released of the earnings figures. “We are proud to report a strong March quarter, with revenue growth accelerating from the December quarter and continued robust demand for iPhone 7 Plus,” Apple chief executive Tim Cook said in the earnings release.
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Cook said the company has seen “great” response to new iPhone 7 Red Special Edition models and is “thrilled with the strong momentum of our services business, with our highest revenue ever for a 13-week quarter.” Still, iPhone sales dipped slightly compared with a year ago to 50.8 million units, below most forecast for the key profit machine for Apple.
Apple also announced that its board of directors has authorised an addition USD 50 billion for dividends and buying back shares in the company, raising to USD 300 billion the total amount of cash to be spent in the program during the coming two years.
While Apple has become the world’s most valuable company, analysts are looking at how the company is diversifying in the face of a saturated smartphone market and increasing competition. The report showed weaker sales of iPads and Mac computers, and a drop in revenue from “other” products including the Apple Watch, specific figures for which were not released.
Apple also reported a 14 per cent drop in revenues from a year earlier for “Greater China,” dropping the region behind Europe and the Americas in terms of sales. Apple’s cash holdings meanwhile rose to a record $256.8 billion, a figure which raises questions for how the company will manage its massive reserves.