Apple iPhone sales higher than expected
Apple Inc's iPhone sales fell for the second straight quarter, although the 15 percent drop was less than expected.
The company's total revenue dropped 14.6 percent in the third-quarter, ended June 25, also declining for the second quarter in a row.
Apple said it sold 40.4 million iPhones in the third quarter, more than the average analyst forecast of 40.02 million, according to research firm FactSet StreetAccount.
Apple CEO Tim Cook is happy with the results.
“We are pleased to report third quarter results that reflect stronger customer demand and business performance than we anticipated at the start of the quarter,”
Apple had reported a 16.3 percent drop in iPhone sales in the previous quarter, the first decline since the smartphone was launched in 2007.
Sales of iPhones account for about two-thirds of the total sales of the world's most valuable publicly traded company.
Apple's iPhone line-up includes the iPhone 6S and 6S Plus, as well as the smaller and cheaper iPhone SE.
Apple's quarterly net profit fell 27 percent to US$7.8 billion (NZ$11 billion), while revenue of $US42.36 billion beat analyst's estimates of U$S42.09 billion, according to Thomson Reuters I/B/E/S.
Sales in Greater China, once touted as Apple's next growth engine, decreased 33.1 percent, compared with a 112.4 percent growth in the same quarter in 2015 and a near 26 percent fall in the second quarter.
Apple's services business, which includes the App Store, Apple Pay, iCloud and other services generated nearly $US6 billion (NZ$8.5 billion) in revenue, up 18.9 percent from the previous year.
Apple’s chief financial officer Luca Maestri says Apple services are doing well.
“App Store revenue was the highest ever, as our installed base continued to grow and transacting customers hit an all-time record,”
The company forecast fourth-quarter revenue of $US45.5 billion to $US47.5 billion, below Wall Street's average estimate of $US45.71 billion, according to Thomson Reuters I/B/E/S.
The forecast, covering the quarter ending September, will likely include at least the first weekend of sales of the iPhone 7 range, which Apple is expected to launch in September.
Up to Tuesday's close, Apple's shares had fallen about 8.2 percent since the start of the year.
US stocks were mixed as Federal Reserve policymakers kicked off a two-day interest rate meeting and investors braced for quarterly results from Apple and Twitter.
Shares of Apple, the world's largest publicly traded company, dipped 0.69 percent ahead of its quarterly due after market close, when investors will be looking for new details about how much iPhone sales are likely to decline in 2016.
Twitter has been struggling with sluggish user growth that has trailed Facebook and other social media competitors and its stock lost 1.07 percent ahead of its report.
Choppy stock trading on Tuesday followed a recent rally to consecutive record highs on the S&P 500 that has stretched price-to-earnings multiples to levels that some investors say presumes that companies will beat second-quarter estimates.
Five of the 10 major S&P sectors rose, while a 1.49 percent drop in the telecom services index weighed heavily.
Verizon Communications fell 1.9 percent after subscriber numbers fell below estimates.
Caterpillar's shares jumped 5.16 percent to touch a year high after quarterly earnings beat expectations.
The Federal Reserve began a two-day meeting and while it is not expected to raise US interest rates, investors will be watching for hints about when the US central bank might make a move.
A set of strong economic data, including Tuesday's housing report, could strengthen the case for the Fed to raise rates earlier than the market anticipates.
"The real thing I'm going to be looking for is, is there a tip of the hat to a potential rate increase in September?" said Brad McMillan, chief investment officer at Commonwealth Financial Network.
The Dow Jones industrial average dipped 0.1 percent to end at 18,473.75 points and the S&P 500 edged up 0.03 percent to 2,169.18 after spending much of the day at a loss.
The Nasdaq Composite added 0.24 percent to 5,110.05.
After investors shrugged of Britain's unexpected vote in late June to leave the European Union, the S&P 500 rallied and is up six percent year to date.
Almost a third of the way into second-quarter reports, S&P 500 companies overall are expected to see earnings dip 3.5 percent, not as bad as the 4.5 percent dip predicted at the start of the month, according to Thomson Reuters I/B/E/S.
McDonald's sank 4.46 percent after reporting worse-than-expected quarterly sales at established US restaurants.
The stock weighed the most on the Dow.
Texas Instruments jumped 7.85 percent after its current-quarter forecast beat analysts' estimates
The stock provided the biggest boost to the S&P 500.
Advancing issues outnumbered declining ones on the NYSE by a 1.58-to-1 ratio; on Nasdaq, a 1.62-to-1 ratio favoured advancers.
The S&P 500 posted 53 new 52-week highs and no new lows; the Nasdaq Composite recorded 119 new highs and 25 new lows.
About 6.5 billion shares changed hands in US exchanges, below the nearly 6.8 billion daily average over the past 20 sessions.