Science-Technology

Investors scorn strong Apple quarter

Company shares down after posting strong sales for iPhones, Apple Watch

22.07.2015 - Update : 22.07.2015
Investors scorn strong Apple quarter

By Barry Eitel

SAN FRANCISCO

Following an outage that knocked out several key services for hours Tuesday, Apple released its third quarter earnings report – the first since the release of the Apple Watch wearable.

Boosted by continued healthy sales of the iPhone 6 and an explosion of popularity in China, Apple CEO Tim Cook claimed that the company’s profits grew 38 percent compared to last year. Cook noted that 47.5 million iPhones were sold between April and June this year, which is a 35 percent increase from last year and more than twice the amount sold four years ago.

“We had an amazing quarter, with iPhone revenue up 59 percent over last year, strong sales of Mac, all-time record revenue from services, driven by the App Store, and a great start for Apple Watch,” Cook said in a statement.

Investors, however, were not pleased with Apple’s performance. Even though revenue narrowly topped analyst expectations, shares of Apple dipped 8 percent in after-hour trading. At one point, Apple lost $63 billion in market value from Tuesday’s close – which is roughly equivalent to the entire value of Lockheed Martin. Wall Street’s tepid reaction showcases how investors expect every Apple quarter to be a blockbuster.    

Apple didn’t provide specific sales figures of Apple Watch and instead lumped the product in a segment that also included iPods and Apple TV units. This “other product” category grew 49 percent over the quarter to hit sales of $2.64 billion. Cook did claim that sales of the smartwatch beat Apple’s internal projections, but he didn’t elaborate on figures.

Apple services including its App Store, iTunes, Apple TV and the new Apple Music were knocked out this morning for more than three hours, the second long outage Apple has experienced this year. Apple-focused blog Apple Insider noted that the outage was probably caused by excess traffic on Apple Music, which was set Tuesday to exclusively announce the nominees for MTV's 2015 Video Music Awards. 

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