Apple Reports Flat Earnings -- Update
4:54p ET January 27, 2014 (Dow Jones)
Apple Reports Flat Earnings -- Update
By Daisuke Wakabayashi and John Kell
Apple Inc. reported virtually flat earnings for the holiday quarter as intensified competition for mobile devices offset growing iPhone and iPad sales.
Shares of the Cupertino, Calif., technology giant fell about 5% in after-hours trading as Apple forecast disappointing revenue for the current quarter.
Apple is coming off its first decline in annual profit in more than a decade amid growing competition in the smartphone and tablet markets. Apple also is facing questions about whether it can repeat its innovative success with a new product category--as it did with the iPhone in 2007 and iPad in 2010.
For the quarter ended Dec. 28, Apple reported a profit of $13.07 billion, slightly below $13.08 billion in the year-ago period. However, Apple's per-share earnings rose to $14.50 from $13.81 because the company's stock repurchase program decreased the pool of total shares.
Revenue grew 5.7% to $57.59 billion from $54.51 billion in the same period a year earlier.
Analysts, on average, estimated that Apple would post earnings of $14.07 per share on revenue of $57.46 billion, according to Thomson Reuters. Apple in October had projected revenue between $55 billion and $58 billion.
For the current quarter to March, Apple is forecasting revenue to range between $42 billion and $44 billion. Analysts had expected $46.05 billion.
Apple said its gross margin, a closely watched indicator measuring the percentage of revenue that remains after manufacturing costs, was 37.9% in the December quarter--higher than the company's estimate range of 36.5% to 37.5%, and compared with 38.6% in the year-ago period.
For the March quarter, Apple forecast a gross margin of 37% to 38%.
For its flagship products, Apple said it sold 51 million iPhones, an all-time quarterly record, versus 47.79 million units in the year ago period. iPad sales rose 14% to 26 million units. Sales of Mac computers climbed 17% to 4.8 million.
The increase in iPhone and iPad sales comes as the company rolled out two new versions of its iPhone, the first time it launched more than one new model of its smartphone at the same time. It also refreshed its iPad lineup within a thinner, lighter model and a smaller version with a sharper display.
Apple isn't the only smartphone maker feeling the pinch from tighter competition. Last week, Samsung Electronics Co., Apple's main rival in the smartphone market, said profitability at its mobile arm fell in the December quarter from an increase in marketing expenses to promote new models. LG Electronics Inc. said it mobile business swung to a loss in the December quarter, hit by price competition and growing marketing expenses.
The short traders took immediate action and dropped the stock some $30 a share before leveling out in after hours trading. Good opportunity to buy in on this pull back if anyone is interested.
4:54p ET January 27, 2014 (Dow Jones)
Apple Reports Flat Earnings -- Update
By Daisuke Wakabayashi and John Kell
Apple Inc. reported virtually flat earnings for the holiday quarter as intensified competition for mobile devices offset growing iPhone and iPad sales.
Shares of the Cupertino, Calif., technology giant fell about 5% in after-hours trading as Apple forecast disappointing revenue for the current quarter.
Apple is coming off its first decline in annual profit in more than a decade amid growing competition in the smartphone and tablet markets. Apple also is facing questions about whether it can repeat its innovative success with a new product category--as it did with the iPhone in 2007 and iPad in 2010.
For the quarter ended Dec. 28, Apple reported a profit of $13.07 billion, slightly below $13.08 billion in the year-ago period. However, Apple's per-share earnings rose to $14.50 from $13.81 because the company's stock repurchase program decreased the pool of total shares.
Revenue grew 5.7% to $57.59 billion from $54.51 billion in the same period a year earlier.
Analysts, on average, estimated that Apple would post earnings of $14.07 per share on revenue of $57.46 billion, according to Thomson Reuters. Apple in October had projected revenue between $55 billion and $58 billion.
For the current quarter to March, Apple is forecasting revenue to range between $42 billion and $44 billion. Analysts had expected $46.05 billion.
Apple said its gross margin, a closely watched indicator measuring the percentage of revenue that remains after manufacturing costs, was 37.9% in the December quarter--higher than the company's estimate range of 36.5% to 37.5%, and compared with 38.6% in the year-ago period.
For the March quarter, Apple forecast a gross margin of 37% to 38%.
For its flagship products, Apple said it sold 51 million iPhones, an all-time quarterly record, versus 47.79 million units in the year ago period. iPad sales rose 14% to 26 million units. Sales of Mac computers climbed 17% to 4.8 million.
The increase in iPhone and iPad sales comes as the company rolled out two new versions of its iPhone, the first time it launched more than one new model of its smartphone at the same time. It also refreshed its iPad lineup within a thinner, lighter model and a smaller version with a sharper display.
Apple isn't the only smartphone maker feeling the pinch from tighter competition. Last week, Samsung Electronics Co., Apple's main rival in the smartphone market, said profitability at its mobile arm fell in the December quarter from an increase in marketing expenses to promote new models. LG Electronics Inc. said it mobile business swung to a loss in the December quarter, hit by price competition and growing marketing expenses.
The short traders took immediate action and dropped the stock some $30 a share before leveling out in after hours trading. Good opportunity to buy in on this pull back if anyone is interested.
