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January 24, 2013

Apple’s Shares Drop After Firm Issues Disappointing Q1 Report

Apple shares fell nearly 11 percent Jan. 23 after the company reported first-quarter sales that fell slightly short of analysts’ expectations, despite record holiday sales of the iPad and iPhones.

Also causing the dive in stock was Apple’s forecast for the second quarter. Analysts were expecting revenues of $45.6 billion compared to Apple’s more modest prediction of $41 billion to $43 billion.

The iPhone maker posted a record quarterly revenue of $54.5 billion compared to revenue of $46.3 billion in the same quarter the previous year. Apple also recorded a quarterly net profit of $13.1 billion — $13.81 per diluted share compared to a net profit of $13.1 billion, or $13.87 per diluted share, in the 14-week quarter a year ago.

Average weekly revenue was $4.2 billion in the quarter compared to $3.3 billion in the year-ago quarter.

“We’re thrilled with record revenue of over $54 billion and sales of over 75 million iOS devices in a single quarter,” said Apple CEO Tim Cook. “We’re very confident in our product pipeline as we continue to focus on innovation and making the best products in the world.”

Apple sold a record 47.8 million iPhones in the quarter, compared to 37 million in the same quarter the previous year. Apple also sold a record 22.9 million iPads compared to 15.4 million in the first quarter of 2011.

Sales of Macs and iPods were down, however. Apple sold 4.1 million Macs, down from 5.2 million in the first quarter of 2011. Apple sold 12.7 million iPods in the quarter, a 2.7 million drop from the 15.4 million sold in the same quarter in 2011.

Apple issued a warning last year that its holiday project schedule, which included iPhones, iPads, iPods and iMacs, would affect profits because manufacturing costs more in the beginning, until the firm refines production.

The iPhone 5, for instance, was to be sold in more than 100 countries by year’s end, the quickest release schedule ever, Apple indicated in the report.

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