Apple earnings: Walmart wins iPhone and iPad wars
Wal-Mart is the latest major U.S. retailer to be hit by the smartphone and tablet wars, as its share price falls in both categories.
Apple reported third-quarter earnings on Tuesday, and the company has lost market share in both the smartphone market and tablet market since the start of the year.
Apple is the world’s No. 1 smartphone maker by revenue, with nearly 9 billion smartphones sold, and it has been one of the biggest losers in the tablet market.
In the smartphone segment, Wal-Marts sales dropped 12.4% in the third quarter, to $2.5 billion, according to analysts polled by FactSet.
The company had a $3.1 billion loss in the second quarter, but its revenue rose 3% to $16.5bn.
“Wal-Mart continues to see a slow but steady decline in sales,” said Mark Zandi, chief financial officer at Wells Fargo Securities.
“In the second half of fiscal year, Walmarts revenue grew 6% year over year, but it also dropped 11% in Q3 and 16% in fourth quarter.”
Walmart shares fell 2% in after-hours trading.
Apple’s stock is up more than 13% in recent days, with a gain of nearly 25% since the beginning of the quarter.
The Nasdaq composite is up about 16%.
The decline in Wal-marts revenues and iPad sales is in part due to the rising costs of the iPhone and iPads, Zandi said.
Wal-mart said that in the fourth quarter, iPhone and tablet sales fell 9% and 5%, respectively, and that it will need to increase prices for iPhones to boost profit growth.
Walmart’s earnings were slightly lower than expected, with revenue in the quarter coming in at $2 billion, down from $3 billion in the year-ago quarter.
Apple had a profit of $10.3 billion.
Shares of Apple closed down 1.9% at $23.80 in after hours trading.