Exalted businesses with stellar track records tend to face a bigger backlash when they inevitably disappoint. Apple (AAPL) fell victim to lofty expectations after it published a robust, but not exceptional, set of third-quarter figures. Investors sent its shares down sharply after the consumer electronics titan missed the more bullish market forecasts for iPhone unit sales and revenue and profit growth.
Apple sold around 47.5m iPhones in the quarter, netting $31.4bn (£20.1bn) for its trouble. Total sales climbed a third to $49.61bn, fuelling a 37 per cent rise in operating profit to $14.08bn. International sales made up 64 per cent of revenue, up from 57 per cent two years earlier. That reflected surging demand in Greater China, where sales more than doubled to north of $13bn. The group also delivered in the core US market, where revenue climbed 15 per cent to over $20bn.
Apple's revenue growth was driven by buoyant sales of iPhones and Mac computers, rising revenue from apps and the recent launch of its Apple Watch and Apple Music streaming service. Apple Watch details were thin on the ground, but management says it has outperformed the original iPhone and iPad over the same post-launch period.
The market's disappointment with Apple could temper sentiment regarding its suppliers across the pond. Those include microchip designers Arm (ARM) and Imagination (IMG), and wireless-testing companies such as Laird (LRD) and Spirent (SPT).
Broker Susquehanna expects pre-tax profits of $71.51bn this financial year, giving EPS of $9.05, rising to $73.73bn and $9.44 in the year to September 2016 (from $53.48bn and $6.45 in FY2014).
