Apple's iPhone unit sales miss expectations, iPads beat

|About: Apple Inc. (AAPL)|By:, SA News Editor

Apple's (AAPL) FQ1 iPhone sales fell short of Street expectations of 56M-57M. iPad sales were above expectations of 24M-25M, and Mac sales slightly above expectations of 4.6M. Expect calls for a larger iPhone (reportedly in the pipeline) to pick up.

FQ2 gross margin is expected be in a range of 37%-38%, which compares with a prior-year level of 37.5%. FQ1 GM, though beating guidance, was down 70 bps Y/Y.

iPhone sales ($32.5B, 56% of revenue) rose 6% Y/Y vs. 17% in FQ4. iPad sales ($11.5B) +7% vs. -13%. Mac sales ($6.4B) +16% vs. -15%.

iTunes/software/services revenue +19% to $4.4B. iPod sales -55% to $973M on 6M unit sales. Accessories +2% to $1.9B.

Exc. retail, Americas revenue -1% Y/Y vs. +1% in FQ4. Europe +5% vs. flat growth. Greater China was a strong point ahead of the China Mobile launch, sales +29% vs. +6%. Japan +11% vs. +41%. Rest of Asia-Pac (features many cost-sensitive markets and seeing strong phablet demand) -9% vs. -6%. Retail +9% vs. +6%.

R&D spend +32% Y/Y to $1.33B (investments in new products?). SG&A +8% to $3.05B. $5B was spent on buybacks.

AAPL -5.7% AH. FQ1 results, PR.