Apple Q3 fiscals are strong, but the iPad shows weakness

Apple has released its financial results for the third quarter, and while the figures were up year-on-year (as ever), the iPad has shown further signs of weakness.

Revenue for the quarter running up to the end of June hit $37.4 billion (£21.9 billion), up 6 per cent from $35.3 billion (£20.7 billion) the previous Q3. Net profit rose to $7.7 billion (£4.5 billion) up 11 per cent from $6.9 billion (£4 billion).

Gross margin climbed to 39.4 per cent from 36.9 per cent year-on-year, and international sales represented 59 per cent of Q3 revenue.

iPhone and Mac sales were both strong, with Apple flogging 35.2 million smartphones (a 13 per cent increase year-on-year) and 4.4 million computers respectively, which drove the quarter's results. The disappointment was the iPad, with the tablet shifting 13.3 million units – that represents a drop of 9 per cent compared to Q3 2013. It's also down on the last quarter, when Apple sold 16.35 million tablets.

The iPod also saw a big drop off, but that's hardly surprising. 2.9 million of the device were sold, which was a drop of 36 per cent compared to the previous year.

Tim Cook said: "Our record June quarter revenue was fuelled by strong sales of iPhone and Mac and the continued growth of revenue from the Apple ecosystem, driving our highest EPS growth rate in seven quarters. We are incredibly excited about the upcoming releases of iOS 8 and OS X Yosemite, as well as other new products and services that we can't wait to introduce."

Luca Maestri, Apple's new CFO who is taking over from Peter Oppenheimer, further noted: "We generated $10.3 billion in cash flow from operations and returned over $8 billion in cash to shareholders through dividends and share repurchases during the June quarter. We have now taken action on over $74 billion of our $130 billion capital return program with six quarters remaining to its completion."