Apple reported its’ 3Q earnings on Monday which suggested that slump iPhone sales has finally began to ease.
Revenues fall
Apple’s revenue fell 15% in the 3Q to $42.4 billion which exceeds analysts’ expectations by $300 million.
The prediction of low revenues was fuelled by last quarters low earnings, indicating a slump in the demand for the companies most popular product the, iPhone. While a continuing draw-back in revenues from the Q3 in 2015 still represents lower demand in iPhone compared to a year ago, the sales slowdown in iPhone has started to ease.
Apple CEO Tim Cook states “[The 3Q revenues] …reflect stronger customer demand and business performance than we anticipated at the start of the quarter.”
iPhone’s continue to provide the largest share of revenues for Apple. Earnings stood at $24.05 billion this quarter, down from $31.37 billion last year’s 3Q. Sales had dropped from 47.53 million in the 3Q of 2015 to 40.40million this year. However, this sales figure still beats estimates by 500,000 sales.
New demand for iPhones has mainly been generated by the release of the iPhone SE model. The new model is a 4-in screen low-priced device and mainly aimed at customers in China and emerging regions.
Revenue from iPads was up $340 million to $4.88 billion. Shipments exceeded estimates of 9.1 million units by 850,000.
Mac’s generated an income of $5.24 billion, compared to $6.03 billion in the 3Q of 2015, selling 150,000 units less than previously estimated.
Apple’s “other product” which include Apple TV’s, Apple Watch Beats products and the iPod pulled in $2.22 billion, $440 million less than a year ago.
Service revenue from services such as AppleCare, Apple Pay and licensing increased 19% to $5.98 billion.
Average earning per share stood at $1.42, beating analyst’s prediction of $1.39.
iPhone sales bottom?
Fourth quarter revenues are predicted to stand between $45.5 billion and $47.5 billion. The iPhone 6S and 6S Plus are still not performing as well as hoped and therefore an increase in iPhone sales is not expected until their successor’s release later this year.
Cook stated in an interview to Bloomberg: “The March quarter seems to have been the low point for the cycle.”
Investors cheer results
Apple shares jumped 7.9% in after hour trading following the earnings announcement late Monday afternoon.
Apple Inc. shares (NASDAQ: AAP) are trading at 103.95 (+7.28%) at 14.58pm, 28 minutes after US market open.