iPad sells 17 million but Q3 earnings fail to meet expectations

Apple stock down as "only" 26 million iPhones were sold during the quarter

Apple has just announced its third-quarter earnings for the period ended on June 30, and the numbers largely missed expectations, except for the iPad which sold 17 million versus a street consensus of 16 million. Overall, revenues were up from $28.6 billion to $35 billion (missing street estimate of $37 billion) and profit climbed from $7.3 billion to $8.8 billion, or $9.32 per share (missing street estimate of $10.36).

The iPhone sold through 26 million units, but that was also below the street estimate of 29 million. Consequently, Apple's stock is already trading down five percent in after hours.

Even though the company didn't meet street expectations iPhone still saw 28 percent unit growth over the year-ago quarter, and the iPad jumped by 84 percent over the year-ago quarter. Apple is naturally very pleased with its iPad success, and its rumored that an iPad Mini will be launching this fall, which could drive iPad growth even higher.

"We're thrilled with record sales of 17 million iPads in the June quarter," said Tim Cook, Apple's CEO. "We've also just updated the entire MacBook line, will release Mountain Lion tomorrow and will be launching iOS 6 this Fall. We are also really looking forward to the amazing new products we've got in the pipeline."

"We're continuing to invest in the growth of our business and are pleased to be declaring a dividend of $2.65 per share today," added Peter Oppenheimer, Apple's CFO. "Looking ahead to the fourth fiscal quarter, we expect revenue of about $34 billion and diluted earnings per share of about $7.65."

More stories

Future iOS updates could end support for 32-bit apps

Fresh warnings in last iPhone and iPad update

By Christopher Dring

Apple opposes FBI order to build iOS "backdoor"

Manufacturer says move would "undermine...freedoms and liberty"

By Dan Pearson

Latest comments (10)

Bruce Everiss Marketing Consultant 7 years ago
Apple shares are still cheap and it is ridiculous that they got cheaper because of a slight slackening in the rate of expansion.
Coming up we have:
1) iPhone 5
2) Revised iPad 3 that doesn't burn the user.
3) iPad Mini with 7 and a bit inch screen (priced right this will outsell the original iPad)
4) Apple Television

So Apple revenues are poised to quite simply explode. Q4 will be amazing.
0Sign inorRegisterto rate and reply
Peter Dwyer Games Designer/Developer 7 years ago

You hope and that's the key word HOPE. We can't actually predict how anything in the tech world will be received.

It's almost certain new Apple tech will be received well but, not a 100% definite. Your own comment about the iPad Retina burning peoples laps is a prime example. I know I didn't bother with one after finding out how hot it got (not burn hot but, certainly no children ever if placed in lap hot!). I also saw an iPad user on the train today looking at my nexus 7 and suddenly finding his iPad a little too big for purpose. Quite an amusing turn around.
1Sign inorRegisterto rate and reply
Bruce Everiss Marketing Consultant 7 years ago
@Peter Dwyer

Very true. I am no fanboy, but there are huge numbers who will buy literally anything with an Apple logo on it.
Like you my tablet is a Google/Asus Nexus 7. My phone is an HTC One X and my laptop is a Dell i5. So I hardly worship at the temple of Steve Jobs.

But Apple are a money making monster and have enough cash in the bank to buy a couple of countries. Yet their P/E ratio remains stubbornly and famously low. It is as if the investment community are just sitting there waiting for the bubble to burst whilst being repeatedly proven wrong by Apple's continuous real world profit performance.
0Sign inorRegisterto rate and reply
Show all comments (10)
Anthony Gowland Director, Ant Workshop7 years ago
I'm going to hate myself for this, but...
Revised iPad 3 that doesn't burn the user
Can you link to a news story of a user receiving burns from an iPad? Not "this is hot to touch", but burns.

Also worth noting the headline of "failed to meet expectations" - these are analyst expectations, not Apple's own expectations, which they surpassed.
1Sign inorRegisterto rate and reply
Tom Keresztes Programmer 7 years ago
They sold 30% more iPhones, and 84% more ipads (17 millions in last quarter). I think not even Amazon manage to sell that numbers from the Kindle fire during last holiday season,
Analyst are looking for an exponential curve, not a steadily raising one. Still surprised that there is something wrong with the economy?
0Sign inorRegisterto rate and reply
Bruce Everiss Marketing Consultant 7 years ago
@Anthony Gowland

Google is my friend:

"Since the iPad’s release, Apple’s comment boards have become electrified with reports about the gadget overheating. One user said that the new iPad burned her thighs, leaving them red for 15 minutes. Another said his “new iPad 32 GB Wi-Fi had been getting hot enough to go into shutdown mode when using the NetFlix App after 30 minutes.” "
0Sign inorRegisterto rate and reply
Anthony Gowland Director, Ant Workshop7 years ago
Yet the same article says
Paul Reynolds, electronics editor at Consumer Reports, told ABC News, “We don’t consider these temperatures to be a real concern. … These are not the temperatures that are going to cause a burn
I would have expected a class action suit by now if people were getting burned by what would clearly be a huge design defect.
2Sign inorRegisterto rate and reply
Fran Mulhern , Recruit3D7 years ago
Yeah, they're hardly burning tempratures - go into any burns unit of a hospital and see what burns really are.

Surprise, surprise, processor runs warmer when being used.
0Sign inorRegisterto rate and reply
Nicholas Pantazis Senior Editor, VGChartz Ltd7 years ago
Well I do think the iPhone sales downtrend is a bit disappointing for Apple, but the iPad is certainly running high. That said, I don't expect the "iPad Mini" to make the kind of waves Bruce does, when it will surely be priced well above the competition (likely starting at $350).
0Sign inorRegisterto rate and reply
Roberto Dillon Associate Professor, James Cook University7 years ago
3) iPad Mini with 7 and a bit inch screen (priced right this will outsell the original iPad)

Did Apple ever priced anything "right"? ;)
0Sign inorRegisterto rate and reply

Sign in to contribute

Need an account? Register now.