Apple shares fall despite rise in revenues and profits

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Apple’s strategy of charging more for its phones has paid off, with revenues jumping in the last three months despite relatively flat sales.

The firm sold 46.9 million iPhones in the quarter to end-September, compared with 46.7 million in the prior year.

But higher prices lifted revenue 20% to $62.9bn, while profits also climbed, rising 31% year-on-year to $14.1bn.

But a warning of possible weaker sales in coming months sparked a more than 4% fall in the share price after-hours.

The total number of smartphones sold by all makers globally declined for the first time in 2017.

But Apple’s strategy of charging higher prices for its phones has helped it to shrug off flagging demand.

The California-based company is also making more money from “services” such as the App store, Apple Music and Apple Pay. Services revenue hit a record $10bn in the quarter.

For the firm’s full 2018 financial year, profits increased 23% to $59.5bn, as revenue rose 16% to $265.5bn.

‘Weakness’

Despite the record figures, shares in the firm sunk in after-hours trading – a fall some blamed on a disappointing forecast for the important Christmas season.

The firm said it expects sales of $89bn to $93bn for the quarter that ends 31 December, against Wall Street’s $93bn forecast.

It posted sales of $88.3bn in the quarter last year.

Chief executive Tim Cook said that Apple is “seeing some macroeconomic weakness in some of the emerging markets” such as Turkey, India, Brazil and Russia.

He said some of that is due to currency fluctuation.

Chief financial officer Luca Maestri said Apple also faces some supply uncertainty related to the roll-out of its latest products.