Apple reported a modest uptick in computer and device sales, as well as faster revenue growth from its business segment that includes iTunes, while meeting its overall forecast during the third fiscal quarter of 2014.
The Cupertino, Calif.,-based company said sales of iPhones, iPads, iPods and Macs during the April-June quarter were up roughly 4.9 percent to more than $31.6 billion compared to the same period last year. Revenue from the iTunes store, plus other software and services including music products, increased 12 percent to about $4.5 billion during the quarter.
The earnings report indicated the continuing drop in revenues related to iPods, which accounted for about $442 million in sales -- 40 percent less than the corresponding quarter in 2013. iPad sales were off 8 percent to about $5.9 billion as well, missing expectations.
Apple sold a record 35.2 million iPhones, 13 percent more than last year, to generate $19.8 billion in revenue, 9 percent above the similar 2013 quarter. The figures did represent a dip, however, from 2014’s second fiscal quarter, by 19 percent in units sold and 24 percent in revenue. Mac computer sales increased by 13 percent year-over-year, but flat sequentially.
In a conference call, CEO Tim Cook cited an IDC report that indicated overall market softness for tablet computers during the most recent quarter. The generally weak iPad sales over the past two quarters have worried some observers, however. Cook pointed to burgeoning sales in developing countries such as Brazil, Russia, India and China, as well as room for innovation in the business market for iPads, as causes for optimism.
As of June 28, the company had $164.5 billion in cash, equivalents, and short- and long-term marketable securities. It spent $3 billion to acquire headphone and accessory vendor Beats Electronics, including the Beats Music streaming service, in late May. During today’s call, Cook called Beats "a fantastic music subscription service," but did not quantify its subscriber base or revenue impact, nor did he signal how the company plans to integrate Beats with its existing products and services.
Since Apple last reported earnings on April 23, its share value is up 26.4 percent to a closing price of $94.72 on July 22, giving it a market capitalization of about $571 billion. The company effected a seven-for-one stock split after trading closed June 6.
Overall, Apple posted a $7.7 billion profit, or 1.29 per share, on revenues of $37.4 billion, up 6 percent year-over-year. That was within the $36 to $38 billion range the company had provided in its guidance. Apple’s fastest year-over-year growth came from China, including Taiwan and Hong Kong, where revenues were up 28 percent year-over-year. The company also plans to pay a dividend of 47 cents per share on August 14.
Earlier on Tuesday, Apple received a patent for technologies it apparently plans to incorporate into a smartwatch. The patent covers technologies for touch-screen-capable, detachable electronic devices and a related wristband, communication protocols based on proximity to other devices, and electronics for gesture-based inputs using the hand or arm.