Apple's earnings fall victim to iPhone sales slump
Tech giant Apple has released its third quarter results for 2016, with revenue falling for a second straight quarter, along with sales of the iPhone.
Quarterly profit fell 27%, as iPhone sales remained in the decline for the second quarter in a row.
Quarterly revenue came in at $42.4 billion, down from $49.6 billion for the same time the year before. International sales accounted for 63% of the quarter's revenue.
Apple's update focuses on services revenue, growing at 19% as App Store revenue hits an 'all-time record'.
"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," says Tim Cook, Apple's CEO, despite the decline.
"We had a very successful launch of iPhone SE and we're thrilled by customers' and developers' response to software and services we previewed at WWDC in June.," he says.
According to the tech giant, Apple sold 40.4 million iPhones during the three-month period, compared with sales of 47.5 million a year earlier. This follows a decline in March that broke Apple's eight-year run of increasing sales for the iPhone.
"Our Services business grew 19% year-over-year and App Store revenue was the highest ever, as our installed base continued to grow and transacting customers hit an all-time record," adds Luca Maestri, Apple's CFO.
"We returned over $13 billion to investors through share repurchases and dividends, and we have now completed almost $177 billion of our $250 billion capital return program.
According to the Wall Street Journal, Tim Cook said iPhone demand was better than the sales figures showed, because it reduced inventory of the smartphone by more than four million units in its retail channels.
"There are a number of encouraging signs in the results. This last quarter was surprising because it was better than we expected from so many different points of view, not just one thing," Cook told the Wall Street Journal.
According to a company statement, Apple is expecting to see revenue between $45.5 billion and $47.5 billion for the 2016 fourth quarter.
