Strong iPhone Sales; Apple Stock Down With Few Watch Details

SAN FRANCISCO (AP) -

On Tuesday, Apple reported strong iPhone sales but remained coy about the performance of its new smartwatch.

While not releasing specific figures for the Apple Watch, Apple reported total results for several products, including the watch, that suggest sales were lower than many Wall Street analysts had expected. The company also issued a revenue forecast for the current quarter that suggested sales could fall below analysts’ prior estimates.

Apple’s latest financial report shows the iPhone is still the key engine of the company’s success. The California tech giant said it sold more than 47.5 million iPhones during the three months ending in June, or 35 percent more than a year ago.

But top executives stood by their decision not to disclose results for the Apple Watch, saying the information could be used by competitors. Many analysts and investors see the watch as an important indicator of the company’s ability to produce successful new products.

In one tantalizing clue, Apple reported $2.6 billion in revenue from the segment that includes the watch and several other products, or about $952 million more than the previous quarter, when the watch had not yet gone on sale. That’s significantly less than the $1.8 billion in watch sales that analysts surveyed by FactSet were expecting.

Apple also forecast that revenue for the quarter ending in September will fall between $49 billion and $51 billion, indicating total sales could fall below Wall Street estimates of $50.8 billion.

Chief Financial Officer Luca Maestri told The Associated Press that revenue from the watch amounted to “well over” that $952 million increase. He said the category also includes revenue from iPods and accessories, whose sales fell in the quarter.

“We beat our internal expectations” for the watch, Maestri said, adding that the number of watches sold in the first nine weeks was greater than the number of iPhones or iPads that the company sold in a comparable period after those products launched.

Apple has previously said it sold 1 million iPhones in the first 74 days, or more than 10 weeks, after sales began in 2007. Apple has said it sold 2 million iPads in the first 60 days, with iPad sales hitting 3 million in 80 days after the iPad was launched in 2010.

For the latest quarter, Apple said revenue from all sources grew 33 percent from last year to $49.6 billion in the April-June quarter, with the iPhone contributing $31.4 billion in sales. Net income climbed nearly 38 percent to $10.7 billion, while earnings amounted to $1.85 per share. That beat the estimates of Wall Street analysts surveyed by FactSet, who were expecting Apple to report earnings of $1.81 per share on sales of $49.25 billion.

The iPhone’s performance was especially notable because it’s been nine months since Apple introduced its latest iPhone 6 and 6 Plus models. Consumer demand for new models usually wanes as time passes, but Apple’s sales are continuing to grow faster than they did in a comparable period after the iPhone 5 went on the market in 2012.

Apple got a big boost from new markets like China, which contributed more than a quarter of the company’s revenue, or $13.2 billion. China sales more than doubled from a year ago. Analysts say the company is also benefiting from its decision to offer bigger screens with the iPhone 6 and 6 Plus, which is helping to lure consumers away from competing phone-makers who started selling bigger-screen devices a few years earlier.

Even so, Apple may have trouble sustaining its recent growth. In the coming months, it will face more difficult comparisons against the surge in sales that followed the iPhone 6 launch last September. But analysts say the company should benefit from the size of its user base: Hundreds of millions of people own older iPhones and are expected to buy new ones when their two-year wireless contracts come up for renewal.

In addition to the Apple Watch, Apple launched its Apple Pay electronic-payments service last fall and a streaming music service this month.