The company also said revenue will be $42 billion to $44 billion
in the current quarter, with gross margins of 37% to 38%. Analysts
had predicted sales of $46.1 billion and a margin of 37.3 percent,
according to data compiled by Bloomberg. Shares fell in extended
The iPhone sales over the holidays indicate that demand may be
ebbing for new models of the high-end smartphone -- which is
Apple's primary revenue source -- as competitors flood in with new
handset and tablet offerings. The numbers are highly anticipated by
Apple's investors because the end-of-year shopping season is
usually the company's most lucrative period.
The question that hangs over Apple: if iPhone isn't the next new
thing, just what is?
"There's a perception problem that they aren't innovating," said
Brian Blair, an analyst at Wedge Partners Corp. in New York.
"That's why new product announcements will be so critical this
Profit was $13.1 billion, or $14.50 a share, for the quarter,
little changed from $13.1 billion, or $13.81 a share, a year
earlier, Cupertino, California-based Apple said today. Sales rose
5.7% to $57.6 billion. Analysts had predicted profit of $14.07 a
share on sales of $57.5 billion, according to the average of
estimates compiled by Bloomberg.
Apple Chief Executive Officer Tim Cook is under pressure to boost
financial results that have stagnated without the introduction of
an entirely new product since the iPad's debut in 2010. In its last
fiscal year, the company posted its first annual profit decline in
at least a decade. Apple shares rose just 5.4% in 2013, trailing
the Standard & Poor's 500 Index's 30% gain.
Apple fell as much as 7.8% in extended trading after the results
Apple's forecast for the current quarter also raised questions
as they offer a glimpse of how sales are faring after the release
earlier this month of the iPhone on China Mobile Ltd.
"The revenue guidance is a little bit lower than what everybody
expected," said Laurence Balter, chief market strategist at Oracle
Investment Research, who has the equivalent of a buy rating on
Apple shares. Yet he said "the good thing is the margins came in
good, the revenue came good, the profits came in solid."
Sales last quarter were fueled by the iPhone 5s and 5c, as well
as the iPad Air and iPad mini, which all made their entrances in
time for the holiday rush. The new iPhones were available in 100
countries by the end of 2013. Apple sold 26 million iPads compared
with analysts' estimates for 25 million units.
Apple's sales in the Americas region fell 1% to $20.1 billion,
while sales in Greater China rose 29% to $8.84 billion.
Electronics, the world's largest seller of smartphones, also is
grappling with slowing growth as it battles Apple for customers
buying the most expensive handsets, and rivals such as Lenovo Group
and Huawei Technologies for more budget-conscious buyers. Last
week, the Suwon, South Korea- based company reported its slowest
profit growth since 2011.
Apple also declared a cash dividend of $3.05 a share and said it
had returned more than $43 billion in payments to date. The company
has been pressured to return more money to shareholders.
Billionaire activist investor Carl Icahn last week increased his
stake in the company to about $3.6 billion and has been pressing
Cook to increase the buyback program to boost Apple's stock price.
Icahn's proposal is slated to be considered at the company's annual
shareholder meeting next month.
-- Bloomberg News --