Apple’s Worst Quarter in 13 Years: Stock Plunges 8 Percent


The second quarterly results of iPhone maker Apple have disappointed the market. Revenue slid sharply for the first time in 51 quarters. The earnings plunged to $50.6 billion, from $58 billion during the same period in 2015, marking a 13 percent decline against the comparable period a year ago.

The company announced a 10 percent hike in dividend and a $50 billion plan as capital return programme. According to reports, falling iPhone sales had shipments down to 50 million, from the 61 million of the corresponding quarter of 2015.

But analysts are expecting a boost in sales later in 2016 when Apple will reveal its next iPhone shipment data in September.

They see the downside in iPhone sales from the company’s haphazard launch of iPhone SE in January 2016 and iPhone 6 Plus release that preceded in 2015.

It was a departure from the established practice with Apple to release only one iPhone each year and do an iterative upgrade every other year, reports Gizmodo.  The release of the iPhone SE has seemingly impressed people that an upgrade is unnecessary every year.

According to the assessment of analysts, one reason for the weakness for Apple in the second quarter was the weak sales in Greater China comprising mainland China, Taiwan, and Hong Kong.

There the revenue fell 26 percent year-over-year to $12.49 billion. In the past, that area was the backbone of growth.

Meanwhile, Apple CFO Luca Maestri pointed to the risk of comparing ongoing quarter’s tough comparison against an “incredibly strong” June quarter in 2015.

Despite the downturn in iPhone sales, Apple CEO Tim Cook told CNBC that the company is in “the early innings of the iPhone.”

Cook described the iPhone business as “healthy and strong” and claimed “Apple Watch”– the company’s main bet for growth outside the iPhone,  “has quickly become the best-selling and most-loved smartwatch in the world.”

The CEO also projected a positive outlook on Apple’s  third-quarter revenue and said it will be between $41 billion and $43 billion.

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