Apple releases disappointing quarterly figures – we find out why

It’s happened – Apple has finally delivered a disappointing result.

The company’s shares have fallen 5% after it announced a profit of $US8.8 billion on revenue of $US33 billion – but year-on-year growth has continued to slow, with MacBook and iPhone sales down too.

Although chief executive Tim Cook has tried to downplay the results, suggesting consumers are waiting for the holiday period to buy, it’s clear that growth is slowing, and the downbeat European economy is having an impact.

Apple chief financial officer Peter Oppenheimer noted Australia in his conference call with investors, saying natural resource-based economies such as Canada and Brazil had seen an impact.

“The economy in Europe is not doing well. We think this impacted our results. We also saw some economic impact in the natural resource-based economies, including Australia, Brazil and Canada,” he said, and suggested that will continue into the next quarter.

The good news is clear. The company reported third-quarter profits of $US8.8 billion, on revenue of $US35 billion. Although Wall Street was expecting $US37 billion, the result was still $US1 billion ahead of Apple’s own projections.

That revenue figure has grown 23% year-on-year – but investors are worried that this is the slowest pace of growth since the June 2009 quarter, when Apple recorded growth of just 12%.

For a company that has regularly recorded growth rates of above 50% every year, the result was a shock for some investors.

The business sold 26 million iPhones, compared to the 35.1 million sold in the previous quarter, even though that figure was up from 20.3 million sold in the June quarter last year.

The iPhone is responsible for about half the company’s revenue – hence the negative reaction.

Despite the release of its new Retina-screen MacBook, Mac sales reached just four million, exactly the same figure as the previous quarter.

There are some good results. The iPad sold 17 million units, up 84% from the same quarter last year, and 5.2 million more than the previous quarter. iPod sales continued to fall, from 7.7 million to 6.8 million, but that trend has been ongoing for some time.

The gross margin for the quarter was also 42.8%, down from the expected 43.68%.

Despite the overall strength of the results, investors responded negatively, sending shares down 5%.

Apple has provided some excuses for the disappointing results. Namely, that people are waiting for the next version of the device.

“Our weekly iPhone sales continue to be impacted by rumours and speculation regarding new products,” said Oppenheimer, who said the company “could not be more confident in our product pipeline.”

However, as MG Siegler points out on TechCrunch, Apple may be “as much to blame for this as tech pundits are” with regard to the rumour mill of new products.

“Apple did throw a bit of a curveball last year when they released a new iPhone in the fall instead of the summer — and you saw what happened as a result: Wall Street totally screwed up expectations for Apple’s Q4. That was the last time Apple “missed”.  But it ultimately didn’t really matter because the change-up turned their Q1 into an absolute blowout.”

Apple is preparing for a “Fall event”, at which it may debut a new iPhone and smaller version of the iPad, but as Siegler notes, this would mean a great holiday quarter coming after two disappointing quarters.

However, it doesn’t seem to matter to Cook: “I’m glad people want the next thing. I’m super happy about that.”