Apple Q4 net profit drops as operating expenses climb

Apple reported a 7 % drop in its fourth-quarter profit as total operating expenses rose, despite higher sales of its products especially Macs, iPads, wearables, home and accessories.

Net profit for the 90 days period ending September 26 declined to $12.67 billion, the business said in a statement on Thursday. Total operating expenses climbed 15 per cent to $9.9bn and net sales rose about 1 % to $64.7bn.

Apple stock dropped over 4 % in extended trading in NY.

“Apple capped off a fiscal year defined by innovation when confronted with adversity with a September quarter record, led by all-time records for Mac and Services,” said Tim Cook, the company’s leader. “Despite the ongoing impacts of Covid-19, Apple is amid our most prolific product introduction period ever, and the first response to all our services, led by our first 5G-enabled iPhone lineup, has been tremendously positive.”

Sales of iPhones dropped 21 per cent year-on-year to $26.4bn, while sales of Macs, iPads, wearables, home and accessories as well as services rose through the period, in line with the company. Americas registered the highest sales accompanied by Europe. However, sales dropped in China.

Apple earlier this month launched its iPhone 12 series, the company’s first 5G-enabled phones, as your competition for fifth-generation technology dominance gets hotter.

The brand new models - the iPhone 12 mini, iPhone 12, iPhone 12 Pro and iPhone 12 Pro Max - were released at a meeting at the company’s headquarters in Cupertino, California, on October 13, that was held online this season because of the Covid-19 pandemic.

“Apple offered no help with iPhone 12 sales over Christmas, Facebook reported a decline in US MAUs (Monthly Active Users) and Amazon is expecting a big jump in costs with uncertain holiday sales,” Jasper Lawler, head of research at the London Capital Group, said. “These exact things are not the perfection the stocks are priced for. The exception to the rule is Google-owner Alphabet which bested estimates because of strong growth in advertising revenues.”