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Apple on Wednesday reported a strong quarter posting a profit of $13.1bn
from selling 28% more iPhones and 48% more iPads, its two
biggest products. However, its shares fell 11% as it did not meet heady market
Apple’s shares which hit a record high of $702.10 last September, on Wednesday
in after-hours trading fell to $461.30, down 34% from their peak.
“There’s nothing that can help the stock from sliding now,” said Mark Moskowitz,
an analyst at JP Morgan Securities, who said Apple’s holiday sales met his own
forecasts, even though they missed others’ predictions.
"It will no longer be the hyper-growth company of the last five years, but
rather a premium, branded consumer company, along the lines of Nike, Louis
Vuitton and Saks," forecast Toni Sacconaghi at broker Sanford C Bernstein in a
note published ahead of Apple's results.
Apple posted record quarterly revenue of $54.5bn
and record quarterly net profit of $13.1bn, or $13.81 per diluted share. These
results compare to revenue of $46.3bn and net profit of $13.1bn, or $13.87 per
diluted share, in the 14-week year-ago quarter. Gross margin was 38.6%
compared to 44.7% in the year-ago quarter. International sales accounted for
61% of the quarter’s revenue.
The flat earnings in the holiday quarter came
after several years of hyper growth and in recent weeks rumours of a loss in
momentum in iPhone 5 sales.
Apple has a world level price for its iPhone and
in key markets such as Asia, Samsung, its key rival, is forging ahead. Last
week, Apple announced an installment credit scheme in the Chinese market.
Apple executives predicted growth would continue
to slow. The company expects revenue to rise about 7% in the current period
after reporting an 18% gain in the holiday quarter.
Average weekly revenue was $4.2bn in the quarter compared to $3.3bn in the year-ago quarter.
The firm sold a record 47.8m iPhones in the quarter, compared to 37m in the year-ago quarter. Apple also sold a record 22.9m iPads
during the quarter, compared to 15.4m in the year-ago quarter. The company sold 4.1m Macs, compared to 5.2m in the year-ago quarter.
Apple sold 12.7m iPods in the quarter, compared to 15.4m in the
“We’re thrilled with record revenue of over $54bn
and sales of over 75m iOS devices in a single quarter,” said Tim Cook,
Apple’s CEO. “We’re very confident in our product pipeline as we continue to
focus on innovation and making the best products in the world.”
Cook urged investors to be skeptical of reports
about the company cutting orders with manufacturers. He said Apple gets parts
from various suppliers, and manufacturing efficiency can vary, making it hard to
discern the company's overall business based on individual pieces of
"There's just an inordinately long list of things
that would make any single data point not a great proxy for what's going on," he
The Wall Street Journal says Samsung's devices
held nearly 27% share of the US mobile subscriber market in the three months
ended in November, according to market researcher comScore, up from more
than 25% in the summer. Apple, by comparison, commanded 18.5% market share in
November, up from 17.1% in the previous quarter.
Apple appears to be preparing a response,
however. The Wall Street Journal reported earlier this month that the company is
working on a lower-end iPhone that could launch later this year.
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Bob O'Donnell, vice
president, Clients and Displays, IDC says Apple's latest earnings is another
sign that the company isn't as invincible as once thought. He says analysts have
been overly optimistic on Apple: