Apple Profit and Revenue Slide as it Copes With Dwindling iPhone Sales

By Robert McMillan 

Apple Inc. posted its third consecutive decline in quarterly revenue and profit Tuesday, as the company searches for a way to offset slowing sales of its flagship iPhone.

The results also marked Apple's first decline in annual revenue and profit since 2001.

For the fiscal fourth quarter, ended Sept. 24, Apple said net income fell 19% to $9 billion, or $1.67 a share, from $11.1 billion, or $1.96 a share, in the same period a year earlier. Analysts polled by Thomson Reuters had expected earnings of $1.65 per share.

Revenue fell 9%, to $46.9 billion, mostly ahead of the launch of the iPhone 7, which went on sale a week before the end of the quarter.

Still, Apple remains the most profitable U.S. company, with net income of $45.7 billion for the fiscal year it just ended.

Tim Cook, Apple's chief executive, said improvements in the company's services business and the introduction of its flagship iPhone in particular were improving the company's outlook for the coming quarter.

"The customer response has really been off the charts," he said "We couldn't be more happy with how it's been received."

Apple issued a bullish forecast for the current quarter, which includes both the holiday-shopping season and sales of its new phone. The company said it expects revenue of $76 billion to $78 billion in the quarter, which would be an increase from $75.9 billion in the same period a year earlier. Before Apple's announcement, analysts had been expecting revenue in the current quarter of $74.9 billion, according to FactSet.

Apple also projected gross margin, a closely watched measure of profitability, of 38% to 38.5%, even to slightly up from 38% in the just-completed quarter.

Write to Robert McMillan at [e-mail]

(END) Dow Jones Newswires

October 25, 2016 16:45 ET (20:45 GMT)

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