Apple reported post close overnight and delivered a solid third-quarter headline result, led by strong iPhone and Mac sales, but shares fell around 8% after hours as Services and China revenue missed expectations and September-quarter guidance came in softer than hoped.
Key results:
- Revenue of US$109.4 billion, up 16%.
- iPhone revenue of US$54.3 billion, up 22%.
- Mac revenue of US$10.4 billion, up 29%.
- Services revenue of US$30.7 billion, up 12% but below expectations.
- Greater China revenue of US$18.8 billion, below consensus.
- EPS of US$2.02, ahead of US$1.89 expected.
Apple expects fourth-quarter revenue growth of 9–11%, below market expectations of more than 12%, with memory and processor shortages affecting iPhone, Mac and iPad supply.
The hardware result was strong, but the softer Services performance matters given it supports much of Apple’s premium valuation. Supply constraints and weaker guidance also raise the near-term risk. Apple remains an exceptional business, but the result did not justify the expectations embedded in the share price.
MM is neutral/negative APPL ~$US330
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