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.
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.
More in moneyNOW
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!
Let's see this is about Apple....Pat wants to split the Peach...Others talking about Trimp? hmmm !
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.
Organized religion is the cause of over population. They will fight to extinction before conceding this truth.
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
- Aug gold fell into negative territory in morning action as the dollar index strengthened after an advance GDP reading showed a 4.0% expansion during Q2 (Briefing.com consensus expected GDP to increase 3.2%). The move lower also came ahead of the latest policy statement from the FOMC released at 14:00 ET. The yellow metal slipped from its session high of $1303.00 per ounce and spent the remainder of the session trading in the red. It eventually settled with a 0.3% loss at ... More
More Market News
The glory days are over for big-box retailers as consumers search for more convenience, say Goldman Sachs analysts.
MUST-SEE ON MSN
- Video: Easy DIY smoked meats at home
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'