Though iPhone sales topped estimates, the device’s average selling price fell 4% from a year earlier. Apple cited the popularity of older, lower-priced models, along with the effect of foreign-currency “headwinds.” The company said iPhone sales jumped 66% last quarter in Japan, where the yen fell about 5% against the dollar during the period.
Total revenue in greater China fell 14% to $4.6 billion. IPhone sales in mainland China rose 5% from a year earlier, Cook said on a conference call.
“That is a lower growth rate than we have been seeing,” Cook said. “I attribute it to many things, including the economy there.”
Apple was helped by lower investor expectations, said Keith Goddard, president of Capital Advisors in Tulsa, Oklahoma, which owns 30,831 of the company’s shares. The previous four quarters, Apple’s stock has fallen after its results were released.
“Expectations of Apple’s growth have been reset to reasonable levels,” Goddard said. “It’s a good sign that the company can navigate through a period of slow innovation, and not disappoint the Street anymore.”
Apple also returned a total of $18.8 billion in cash to shareholders last quarter in the form of dividends and stock buybacks.
“Buybacks were more than double what we expected,” said Peter Misek, an analyst at Jefferies LLC in New York, who has a hold rating on shares of Apple. “It was a good quarter.”
The company sold 31.2 million units of the iPhone, its best-selling and most profitable product. Analysts had estimated 26.1 million on average. Apple’s gross margin, the percentage of sales left after subtracting production costs, was 36.9%, compared with the company’s target of 36% to 37%.