News Column

Apple Results Miss the Mark

Oct. 26, 2012

Jon Swartz, USA TODAY

Apple may have a hit product in iPhone 5, but it indirectly led to the company missing a beat on its earnings Thursday.

And with the overhaul of its product line, featuring the iPad Mini -- which can be preordered starting today -- and new desktop computers, some analysts wonder if it might be a lingering issue.

Apple blamed the higher production costs of new products -- including its popular iPhone 5, launched Sept. 12 -- for posting earnings that fell short of Wall Street estimates.

After the stock market closed Thursday, Apple said it earned $8.2 billion, or $8.67 per share, on sales of $36 billion in the fiscal fourth quarter. The earnings-per-share missed Wall Street's expectations of $8.75 per share on sales of $35.8 billion.

Apple earned $7.05 per share on $28.3 billion in revenue in the same period a year ago. Forecast-cautious Apple said it had expected earnings of $7.65 per share and revenue of $34 billion.

Apple shares which closed down $7.29 Thursday to $609.54 ahead of the earnings announcement, tumbled as much as $5.05 to $604.49 in after-hours trading.

Several analysts had expected boffo sales of iPhone 5 to propel Apple shares back to all-time highs, set last month with that product's launch. Despite a recent dip in its stock price, Apple remains the world's most valuable public company, at about $575 billion.

A record 5 million iPhone 5's were sold in the first week, prompting analysts to pull out their calculators to determine how that might affect Apple's revenue in the recently completed quarter. Their task has been complicated by reports that Apple slowed production to fix problems with tools scratching the smartphone.

"I'm not projecting whether (iPhone) supply and demand will balance in the current quarter," Apple CEO Tim Cook said during a conference call.

A burst in sales was likely offset by a slowdown in the prior two months as consumers waited for the new smartphone, says IDC analyst Karsten Weide. Analysts, on average, are expecting iPhone shipments of about 26 million for the September quarter -- roughly flat, compared with June.

The same might hold true for iPad. Analysts expect about 16.5 million iPad sales, down slightly from 17 million units shipped in the period before, because consumers waited for Tuesday's announcement of the iPad Mini.




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Source: (c) Copyright 2012 USA TODAY


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