1 Record third quarter for Apple (Katie Hope on BBC)
Apple has posted a record third quarter as soaring demand for iPhones sent
profits higher. The technology giant sold 47.5 million iPhones in the quarter
to 27 June, up 35% on a year ago, with Mac computer sales up 9% to 4.8 million.
The performance resulted in what chief executive Tim Cook called "an
amazing quarter".
Profits rose by 38% to $10.7bn, while revenue was up
33% to $49.6bn. The third quarter is typically the slowest for iPhone sales because
many customers put off buying new phones, on the expectation of a new model. Despite
the strong results, shares fell 6.7%, or $8.85, to $121.89 in after-market
trading in New York.
Analysts blamed the fall on disappointment about the
company's revenue forecasts for the fourth quarter, which were slightly lower
than expected, as well as the firm's profits being too heavily dependent on the
iPhone. Demand for its iPad tablets remained weak, with Apple selling 10.9
million, down 18% from a year earlier.
Apple said its gross margin - the difference between
the amount it spends on making the products versus how much consumers pay - was
39.7%, up slightly on a year ago. But Colin Gillis, an analyst for BGC
Partners, said that the firm's "complete dependence" on iPhone sales
and growth in China was still a concern.
2 US tech rally seen unraveling (Straits Times) The
biggest technology rally since October was knocked cold, as disappointing
earnings reports punished Microsoft and left Apple in danger of its worst-ever
loss of market value.
Five days after Google's earnings sparked the
largest one-day increase in market capitalization, computer and software shares
are tumbling. Apple, Microsoft and Yahoo! retreated on disappointing results.
Apple, the world's most valuable company, dropped 6.7 per cent, a slump that
would wipe more than $50 billion from its value.
Cracks in the facade appeared before Tuesday. Intel,
kicking off earnings by the largest US technology companies last week, said it
expects the personal-computer market to fall further than expected,
spotlighting the challenges for chipmakers. International Business Machines
Corp. dropped 5.9 per cent during regular trading Tuesday after sales fell for
a 13th quarter.
At the start of the year, analysts forecast the
technology sector would deliver a 13 per cent increase in profit during the
second quarter, according to a Bloomberg survey. Those expectations were
lowered to a 2.4 per cent gain as of July 17.
Apple had recovered almost 10 per cent in the past
two weeks leading up to earnings, after being pushed to the brink of a
correction. The shares dropped 9.7 per cent from an all-time high in February
through July 9, erasing $83 billion of market value, amid concern a rout in
China's market would leave consumer with less money to buy gadgets.
Toshiba overstated its operating profits by 151.8bn
yen (£780m) over several years in accounting irregularities involving its top management,
independent investigators said on Monday. On Tuesday, the president,
vice-chairman and adviser quit.
“The scandal is definitely is a big hit for the Abe
regime and Abenomics, since reformed corporate governance is a key element of
Japan’s growth strategy,” said Andrew DeWit, a professor at Tokyo’s Rikkyo
University.
Japanese companies have had a history of difficult
relationships with their shareholders. An ACCA and KPMG Singapore corporate
governance report released in November 2014 ranked Japan 21st of 25 countries
surveyed, behind the Philippines, Indonesia, Cambodia and China.
The similarities between the Toshiba case and that
of Olympus – whose boss quit in 2011 after it was revealed that $1.7bn (£1.1bn)
of losses had been hidden – have not gone unnoticed.
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