Apple profit jumps but shares slip

[SAN FRANCISCO] Apple on Tuesday reported that its quarterly profit leapt 38 per cent to US$10.7 billion on surging iPhone sales, but fell short of analysts' expectations.

Apple shares fell sharply in after hours trading.

"We had an amazing quarter," chief executive Tim Cook insisted, noting that iPhone revenue in the quarter that ended on June 27 was up 59 per cent from the same period a year earlier.

Analysts had expected Apple to sell even more iPhones and were looking for a brighter forecast than was given for the current quarter.

Apple shares dropped more than six percent to US$121.94 in after-market trades that followed release of the earnings figures.

Sales of iPhones have been powering Apple profits, and any hint of a plateau spooks investors.

Apple sold 47.5 million iPhones in the quarter, with sales up 85 per cent in Greater China where the company's overall revenue more that doubled to US$13 billion, accord to chief financial officer Luca Maestri.

Apple did not detail specifics on sales of its newly-launched smartwatch, instead folding the figure into an "other" category that rose 49 per cent to US$2.64 billion Cook said during an earnings call that sales of iPhone, iPad, Apple Watch and Macintosh computers "topped internal expectations." Nearly three months after the launch of Apple's fashionably smart wrist wear, some analysts say it's not a mainstream hit.

But others see promise in its popularity with Internet-savvy younger people.

A recent study by research firm Slice Intelligence suggested that, based on a large sampling of email receipts in the United States, orders for Apple Watch have plunged 90 per cent since the week that the wearable computing gadget made its debut.

The estimate did not factor in data about Apple Watch sales at real-world stores.

However, Cantor Fitzgerald experts believe Apple Watch will be a "go-to gift" during the year-end holiday season and become the best selling new product in Apple's history.

Apple Watch was the first new product line introduced by the culture-changing company behind iPhone, iPad, iPod, and Macintosh computers since 2010.

Global Equities Research managing director Trip Chowdhry has estimated Apple could sell 20 million to 25 million of the watches in the final three months of this year.

AFP