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Why did Apple stocks fall if the earnings unexpectedly grew?

On Tuesday, Apple reported fiscal earnings, overlapping Wall Street expectations. Apple’s every major product line grew more than 13% on an annual basis.

Overall, Apple’s sales increased by 37% from the same quarter last year. iPhone sales increased approximately 51% on an annual basis.

However, after Tuesday, Apple stock decreased more than 3% in extended trading. It dropped after Apple predicted that its earnings growth in this quarter would not be as strong as the previous quarter.

Estimations

Here are the numbers compared to the Wall Street expectation, per Refinitiv estimates:

  • EPS: $1.31 vs. $1.02 estimated
  • Revenue: $81.42 billion vs. $73.31 billion estimated, up 36%
  • iPhone revenue: $39.58 billion vs. $34.02 billion estimated, up 49.79%
  • Services revenue: $17.49 billion vs. $16.34 billion estimated, up 34%
  • Other Products revenue: $8.77 billion vs. $7.81 billion estimated, up 41%
  • Mac revenue:$8.25 billion vs. $8.08 billion estimated, up 17%
  • iPad revenue: $7.38 billion vs. $7.16 billion estimated, up 13%
  • Gross margin: 43.4% vs. 41.8% estimated

However, Apple CFO said Apple expects considerable annual growth in the current month. Maestri noted that because of foreign exchange rates, Apple expected less than 37% growth in September in its services and supply for iPhones and iPads.

In a call with analysts, Apple CEO Tim Cook said that Apple sees supply restrictions related to chips that might affect the company’s iPhone and iPad sales in September.

Apple also had a great month in China, Taiwan and Hong Kong. Apple reported around $14.77 billion in sales in this region, which is higher by 59% from the same quarter last year.

Americas sales also increased nearly 34% annually to $39.58 billion.

Apple’s quarter in June seemed one of its slowest of the year. However, the company benefitted from its promotions and sales, such as work-at-home and remote schooling trends that boosted the sale of its premium computers.

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