By Xuanyan Ouyang
Apple Inc. turned in stronger-than-expected first quarter results Tuesday evening, but the high-tech giant warned investors that sales will fall short of Wall Street forecast in the second period.
In the quarter ended Dec. 26, Apple’s net income increased by 1.9% to $18.36 billion, or $3.28 per diluted share, from $18.02 billion, or $3.06 per share.
Revenues were $75.87 billion – slightly below the $76.59 billion analysts surveyed by Yahoo Finance had been expecting, and up a modest 1.8 percent from $74.60 billion a year ago.
“Our team delivered Apple’s biggest quarter ever, thanks to the world’s most innovative products and all-time record sales of iPhone, Apple Watch and Apple TV,” Tim Cook, Apple’s Chief Executive Officer, said in a prepared release.
Apple’s per share earnings landed 5 cents above the $3.23 analysts had forecast. The 7.2% rise in per-share earnings, much bigger than the 1.9 percent rise in overall profit, reflected a drop in diluted shares outstanding to 5.59 billion from 5.88 billion a year ago.
Wall Street has been expecting Apple to report sales in the second quarter of $55.64 billion. But on Tuesday the company said it now expects second quarter revenue of “between $50 billion and $53 billion.”
In recent months, the Silicon Valley giant has been facing doubt from investors worried that Apple’s hypergrowth will slow down. As a result, its stock price has dipped by 12.7 percent in the last three months. The company’s shares closed up 55 cents Tuesday, at $99.99. Apple disclosed its earnings after the market’s close; in after-market trading the company’s shares were down $2.83, or 2.8 percent.
Analysts say that the slowing global market, especially the cooling economy in China, has brought a halt to Apple’s record history of increasing iPhone sales year-over-year since the smartphone’s debut in 2007.
Apple’s revenue relies on the sales of iPhones substantially: Fully 66 percent of sales were from iPhones in fiscal year 2015, according to the company’s 10-K filing.
Much of that product’s sales growth has come from what Apple calls “Greater China”: Apple’s 10-K annual report showed that total annual sales in the region jumped 84 percent $58.72 billion.
Along with the recent reported slowdown of growth in China, competitors’ aggressive price-cutting has also squeezed Apple’s sales growth.