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Apple Profits Up 13% As Telstra + Optus Struggle To Supply New Iphone 6

Apple Profits Up 13% As Telstra + Optus Struggle To Supply New Iphone 6

Revenues rose to $8.47 billion in its fiscal fourth quarter ended Sept. 27 from $7.51 billion in the year-ago period.
The flood of demand for the high priced iPhone 6 is in sharp contrast to Samsung’s fall in profits and revenues in their mobile communications division.  

In an interview with The Wall Street Journal, Apple Chief Executive Tim Cook said the upgrade cycle of new iPhones has been better than it had expected with combined sales of iPhone 6 and 6 Plus exceeding last year’s iPhone 5S-Apple’s high-end model at the time-demand in every single market where the phones are available.

“We knew it would be good, but it’s selling faster than even we thought,” said Mr. Cook. “It’s clear that this is a big one.”

Apple said it sold 39.27 million iPhones, up from 33.79 million units in the year-ago period, after Apple began selling two new iPhones on Sept. 19. Analysts had been predicting that Apple would sell 37.8 million iPhones in the period.

Apple said it bought back $17 billion worth of stock during the September quarter. Earlier this month, activist investor Carl Icahn sent Mr. Cook a letter urging the company to buy back more shares because he considered the company’s stock undervalued. Apple made its share purchases before Mr. Icahn’s letter.

Overall revenue rose 12% to $42.12 billion from $37.47 billion in the same period a year earlier.

Shares of Apple rose nearly 1% in after-hours trading.

Apple said its gross margin was 38% in the September quarter-at the high end of the company’s estimated range of 37% to 38%.

For the December quarter, Apple said it forecasts a gross margin of 37.5% to 38.5%.

The iPhone 6 with a 4.7-inch screen and the iPhone 6 Plus with a 5.5-inch display are in short supply with both Telstra and Optus struggling to supply orders placed weeks ago.

Apple said it sold more than 10 million iPhones in the first weekend that the phones became available. There is still a wait of more than a week to get the new phones, according to Apple’s website.

The iPhone strength also is in contrast to sluggish iPad sales. Apple said it sold 12.3 million iPads in the period, down from 13.1 million a year ago. As laptops become lighter and smartphones become larger and more capable, tablet computers are feeling the squeeze. Apple refreshed its iPad lineup last week and introduced a thinner, more powerful iPad Air 2 with a Touch ID fingerprint reader.