Apple falls nearly 10%; iPhone sales disappoint

Sales of the smartphone miss Street estimates slightly. Shares fall under $460 in after-hours trading. Apple earnings slip from a year ago.

By Charley Blaine Jan 23, 2013 5:48PM
© Daniel Acker/Bloomberg via Getty ImagesUpdated: 8:41 p.m. ET

Shares of Apple (AAPL) tumbled sharply in after-hours trading Wednesday after the company reported quarterly iPhone sales that just missed Wall Street estimates.

Revenue of $54.5 billion was up 18% from a year earlier but also about $230 million less than expected. Earnings of $13.81 a share were down 6 cents from a year earlier but ahead of the Street estimate of $13.44.

The company said it sold 47 million iPhones in its fiscal first quarter, up 29% from a year earlier but down slightly from Street estimates of sales of 48 million units and hopes for sales of 50 million units.

Shares were down $50.52, or 9.8%, to $463.49 at the end of after-hours trading; it had traded as low as $457.30. It will weigh on markets on Thursday. Apple hasn't closed below $460 since Feb. 3, 2012. The stock had closed at $514.17, up $9.40, in regular trading.

With Wednesday's close, the shares were down 26.7% from their closing high of $702.10 in September. Some analysts see the stock headed sharply lower. Jeff Gundlach of DoubleLine Capital told CNBC that the shares could hit $425. 

The big question in the report was iPhone sales, which accounted for 56% of total revenue. Reports had suggested sales had not been as robust as expected, perhaps as few as 44 million sold.

Sales were better than that. In fact, those 47.8 million units sold were a record. Traders, however, had hoped for more.

There were questions about whether Apple could get the phones produced fast enough. In addition, there were worries that the smartphone market was getting saturated, thanks to new devices hitting markets worldwide. Samsung has emerged as an intense competitor.

At the same time, Apple said it sold 22.9 million iPad tablets, up nearly 48.7% from a year earlier and 34% from the fiscal fourth quarter, which ended in September. But iPad Mini sales could have been much stronger except for problems getting them produced.

Meanwhile, sales of Macintosh computers were down 21.1% from a year earlier. Manufacturing constraints and cannibalization of sales by the iPad kept sales down, CEO Tim Cook said on the company's conference call.

The iPad has also hurt sales of low-end computers that use the Microsoft (MSFT) Windows operating system. Microsoft, the publisher of MSN Money, reports results after Thursday's close.

Sales of iPod music players were off 17.5%.

Apple expects $41 billion to $43 billion in revenue in the fiscal second quarter and a gross margin of 37.5% to 38.5%. The margin, a key profitability measure, was 38.6% in the first quarter.

Apple's board declared a cash dividend of $2.65 a share payable Feb. 14 to shareholders of record on Feb. 11. The dividend rate was unchanged.

The earnings came after what had been a decent day for stocks. The Dow Jones industrials ($INDU) and the Standard & Poor's 500 Index ($INX) closed at five-year highs. The Dow was up 67 points to 13,779, its best finish since Oct. 18, 2007. The S&P 500, up 2 points to 1,495, had its best close since Nov. 6, 2007.

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Jan 23, 2013 6:12PM
Looks like margin call selling to me.  Not at all that bad a report of sales and earnings relative to estimates.  At 485 and below you have a winner on EPS and future growth in China........I think.  Share buyback not at all out of the picture for Apple management.   
Jan 23, 2013 7:17PM
Only in the ****ed up world of Wall street can those kind of earning disappoint.
Jan 23, 2013 8:13PM
Im at a lose, I really am.  Since when is positive revenues a bad thing.  Since when are millions bad, how about billions.  Since when has increased revenues and profits been bad.  And a stock pile of 137 billion now.  This is absolutely insane.
Jan 24, 2013 9:54AM
Last night on the way home from work, a mother of three young children was killed at the scene when she was struck head on by a younger women who was texting or reading a text on her cell phone.
I think investors should shovel more money into telephones that you text on and stare down at, while sliding your fingers around, so more young mothers can be killed by more brainless, mind controlled, materialistic, clueless, shopping bot, young sheeple.

Just imagine the money that you will make!

Jan 23, 2013 8:49PM
Puleeese. Don't insult the great newspaper with a blowhard, egomanic.
Jan 23, 2013 10:25PM

Let's see this is about Apple....Pat wants to split the Peach...Others talking about Trimp? hmmm !


Jan 23, 2013 9:10PM
Mr Trump is looking for a way to stop people from expressing their minds...he feels that if he can own the  NYT, HE will be able to swing politics in his way, but he must understand people have minds of their own...he should try and buy a good-looking toupe(wig)  and  get a nice face lift...and make himself look more like a human,,,why does he want to wrap America around his finger? he has no leader-ship skills...the show he runs"fhe aprentice" proves he is just hog-wash...he will never be president of America.....what the hell is he looking for?  man go and rest yourself  nobody want you around,,,you are just making the world miserable.
Jan 23, 2013 9:56PM
Democrats would never allow Trump to buy their mouthpiece, the NY Times. 

Democrats will do to Trump, what they did to Rush Limbaugh when he tried to get part ownership of the St. Lois Rams.  But, it would be worse for Trump, because, the NY Times is to the democrats, what Pravda was to the communist party in the USSR. 

Jan 23, 2013 6:37PM

Organized religion is the cause of over population.  They will fight to extinction before conceding this truth. 

Jan 23, 2013 6:58PM
Love the stop loss trading great time to jump in for quick rewards love it.
Jan 23, 2013 5:58PM
Like everybody says "split the stock and I`ll buy it"
Jan 23, 2013 8:06PM
OMG!!!!! Who could bear the THOUGHT of SOME Billionaire tyrant exploiting an "American" icon such as the New York Times for his own selfish gain and personal satisfaction!!!  

The American people deserve more like it exploiting the agenda of Socialist bent on wiping out ALL american icons and replacing them with european ones.
Jan 23, 2013 9:52PM
Trump could bring this rag back from "All the news that's fit to distort" to a newspaper without a far-left agenda. 
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