Apple earnings sag as consumers wait for new iPhone

Apple (AAPL) could really use a shiny new iPhone.

For its latest quarter, the technology giant on Tuesday reported net income of $10.7 billion, or $1.42 per share, down 27 percent from the year-ago period, while revenue fell nearly 15 percent to $42.4 billion. Although those earnings modestly beat Wall Street forecasts, the results highlight the dwindling sales of the iPhone, Apple's most profitable product, as consumers await the iPhone 7 later this year.

Apple shipped 40.4 million iPhones, down 21 percent from the year-earlier period, topping the 40 million figure Wall Street analysts had expected. The devices account for roughly 60 percent of Apple's revenue.

Revenue from the company's services business, which includes the App Store, iTunes and streaming music service, rose 19 percent to $5.97 billion, also topping some analyst forecasts.

"We see investor sentiment improving in the coming quarters as the [latest quarter] likely marks an iPhone trough, with new products set to be released in September," wrote Angelo Zino, an analyst with S&P Global Markets Intelligence, who rates the stock a 'strong buy', in a note to clients. "In addition, a potential iPhone 8 'super cycle' in 2017 on the 10-year anniversary of the iPhone should offer downside support should new products this Fall disappoint."

Shares of Apple have slumped nearly 8 percent this year underperforming the S&P 500 Index, which has gained 6 percent during the same time period. The company forecast revenue for the current quarter of $45.5 billion to $47.5 billion. Analysts' forecasts called for $45.5 billion.

The stock rose 6.4 percent, up $6.19, in after-hours trading to $102.75.

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