Apple posts strong Q3 profit, but iPad sales slump

Apple posts strong Q3 profit, but iPad sales slump

Apple has posted solid results for its fiscal third quarter, but announced disappointing iPad sales for the second period in a row. The electronics giant reported earnings in the quarter ahead of Wall Street expectations.

Apple reported revenue of £21.9bn ($37.4bn) for the quarter to June 30, an increase of 6% from £20.7bn ($35.3bn) on last year's Q3. Net profit jumped 11% to £4.5bn ($7.7 bn) from £4bn ($6.9 bn).

Gross margin rose 2.5% to 39.4% year-on-year with international sales accounting for 59% of the quarter's revenue.

Apple sold 35.2 million iPhones, up 13% year-on-year, and 4.4 million Mac computers, in the quarter. Meanwhile, sales of the iPod fell by 36% to 2.9 million units compared to the same quarter a year ago.

However, the technology firm reported disappointing iPad sales for the second period in a row - selling 13.3 million units, a 9% drop compared to the same quarter last year. Apple sold 16.35 million tablets in its second quarter.

Apple said it expects revenue of $37-$40bn for its fourth quarter to September, a little lower than the $40.44bn forecast by industry analysts. Apple also predicted a gross margin of 37-38%.

Apple chief executive Tim Cook said: 'Revenue was fueled by strong sales of iPhone and Mac and the continued growth of revenue from the Apple ecosystem, driving our highest EPS growth rate in seven quarters.'

Richard Windsor, an analyst with Radio Free Mobile, believes that as so much has been built into the launch of Apple's next iPhone, there appears to be little left on the table for investors in the short-term.

'The soft guidance is pointing to a later-than-expected launch of the iPhone 6 and a greater period in fiscal Q4 when users are holding off from upgrading their devices,' he said.

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