Here’s how Apple’s Q3 results stack up against the analyst expectations compiled by Fortune. Revenue grew 6 percent, but Wall Street was expecting more. Earnings per share was marginally higher than expected, at $1.28 per diluted share. Gross margin was higher than expected at 39.4 percent.
iPhone sales were slightly lower than expected, while iPad sales were significantly below analyst predictions. Mac and iPod sales, in contrast, were higher.
Overall, market reaction was muted, with a slight drop in the share price in post-market trading – but with overall results broadly in line with expectations, all eyes now will be on Q4. Apple has issued wider than usual revenue guidance of $37 to $40 billion, but with the WSJ reporting that the company has ordered a record number of iPhones from suppliers, expectations will be at the high end.
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What I find interesting is how Analysts were so off the mark in Mac and iPod sales. Not by just a little bit. A whole lot.
I imagine that the concept has been that people are migrating away from the traditional devices, but clearly they have not been replaced yet. The iPod is still awesome in terms of its size and form factor and “does one thing extremely well”. The Mac is still a mature platform with extensive capability, unlike the iPad. Analysts should expect the industry to shift so quickly in the spring quarter.
I must say I was also surprised by how well the iPod is hanging in there. As techies, it’s easy to forget that the mass-market behaves a little differently.
I believe the iPod segment includes the iPod touch, as well as the traditional non-iOS iPod Classic and nano. I see a LOT of iPod touches go out the door for younger kids; keeps them off mom’s and dad’s iPhones and from crying about it (usually the sale comes right on the heels of an AppleCare+ water or screen cracked claim). Plus low cost of ownership for FaceTime with Grandma versus the iPad, and the lack of multiple-user profiles on the iPad is problematic in a family setting.
With the Mac gaining Phone.app in 10.10, and with LTE Adv coming down the pike relatively soon, I think Apple has been hanging onto the iPod moniker because at some point, sooner than later, the “iPhone” will die. Once on LTE Adv every device with a radio will be able to be a “phone”, and Apple will have to drop back to using the iPod name. So it important to keep it relevant. (Actually, I’d like to see the “iPod” become the superset of technologies of the iDevices, rather than merely iOS.)
Heh, I don’t think the iPhone brand is going anywhere, whatever tech is used to make calls in future, but you may well be right about kids keeping the iPod alive.
I think that usually the attention Apple gives to products in that Q is what will drive sales higher or lower than expected. Apple gave a real boost for macs in this quarter (with new OS X Yosemite and the main focus on it in the keynote) while iPhone and iPad remained kind of on a “waiting mode”. The iPod benefits from that writing mode as well, I think.