Shares in Apple plunged by almost 10% in after-hours trading on Wednesday in New York after the consumer electronics company published first-quarter financial results that fell short of analysts’ expectations.
Investors appear to have taken fright, in particular, at the fact that Apple missed market expectations for iPhone sales. The company sold 47,8m iPhones, against analyst expectations of 50m sales. In the same quarter a year ago, Apple sold 37m iPhones. iPad sales were in line with expectations at 22,9m units against 15,4m previously.
Although sales grew by 18% year-on-year to US$54,5bn (that’s a jaw-dropping $4,2bn/week), earnings were flat at $13,1bn. Gross margins fell from 44,7% to 38,6% and it expects this to fall further to between 37,5% and 38,5% in the current quarter.
Mac sales took a knock, falling to 4,1m from 5,2m in the year-ago quarter. iPod sales also declined, from 15,4m a year ago to 12,7m.
The company continues to rake in cash, though, reporting $23bn in cash flow from operations during the quarter, prompting it to declare a cash dividend of $2,65/share payable on 14 February.
It’s the third quarter in a row that Apple has missed market expectations. The company also guided the market to sales of between $41bn and $43bn in the current quarter — below the $45bn average that analysts had been forecasting.
Apple’s share price was at $463,49 in after-hours trading, or 34,3% below their peak of $705,07, as investors fret that the company’s strong growth days are behind it. — (c) 2013 NewsCentral Media