Apple numbers fail to meet targets
Apple's results fell short of Wall Street's expectations as the European economy sagged and consumers held off on buying its flagship
iPhone ahead of a new version expected in the fall, hitting its stock price.
Shares of the world's most valuable technology company shed more than 5 per cent of their value in the US last night Appafter Apple - which beats Wall Street expectations with near regularity - reported its second quarterly miss on results in less than a year.
The stock slid to $570.81 in late trade after closing at $600.92 on the Nasdaq.The disappointing numbers highlight how the Apple brand is becoming less resistant to the economic and product cycles that have plagued rivals.
Apple, which Tim Cook has led since last August, divided the blame for the shortfall between muted consumer purchases in Western European countries and the pullback in demand as consumers wait for a new iPhone model that many expect will be launched in September or October.
From March to June, Apple shipped 26 million iPhones, well below the 28 million to 29 million that Wall Street analysts had predicted, even taking into account a pause in buying ahead of the iPhone 5.
It was a far cry from the 35.1 million that moved in the March quarter.Sales of the iPad, the tablet that accounts for well over half the world's market, came in at 17 million in the fiscal third quarter, above expectations.
Apple, notorious for its conservative forecasts, estimated earnings for the September quarter of $7.65 a share on revenue of $34 billion, well below the average estimate of $10.23 a share on revenue of $38.03 billion.
"It's a big miss. The guidance for next quarter was very low. I'll be very interested to know if it was a product transition or the economic" turbulence," said David Rolfe, chief investment officer for Wedgewood Partners.
"What is key is the mixture between iPhone and iPad. The iPhone has higher margins. iPhone sales were lower than expected - meaningfully lower - and that translates into a big hit on the bottom line."
The Silicon Valley giant has a lot riding on its next iPhone, the product that yields more than half its revenue and helps shore up overall margins.Apple has seen Samsung Electronics - now the world's largest seller of smartphones - and other handset manufacturers using Google Inc's Android software chip away at its market share.
"It really is the iPhone company. The iPad is not strong enough to beat numbers," said BGC Partners analyst Colin Gillis.
"The iPhone 5 is already the most hyped device and for it to exceed expectations is going to be really hard."