Apple shares fall despite announcement of record iPhone and iPad sales

• Record figures were short of analysts' expectations • Shares fall 5% in after-hours trading

Apple shares fell late on Monday, after the tech giant announced record sales of iPads and iPhones in the run-up to Christmas that still fell short of analysts’ expectations.

Releasing its results after the stock markets closed, Apple reported record sales of 51 million iPhones during the last quarter, up from 47.8 million in the same period last year. The company sold 26 million iPads, also a record.

The sales helped Apple turn in a profit of $13.07bn, slightly below $13.08bn profit in the year-ago period. Revenue grew 5.7% to $57.59bn from $54.51bn in the same period a year earlier.

The iPhone sales came after the launch of two new phones last year and were below the 55 million analysts had been expecting. Shares initially fell over 5% in after-hours trading.

“We are really happy with our record iPhone and iPad sales, the strong performance of our Mac products and the continued growth of iTunes, software and services,” said Tim Cook, Apple’s chief executive, in a statement. “We love having the most satisfied, loyal and engaged customers, and are continuing to invest heavily in our future to make their experiences with our products and services even better.”

Sales of iPhones have been challenged in recent years by ever more sophisticated offers from Samsung and other rivals running Google’s Android operating system. Samsung too has struggled amid ever intensifying competition, however, and it reported a dip in profits in December.

Apple has attempted to head off a sales slump by expanding in China, Japan and other countries. It recently struck a deal with China Mobile, the world's largest wireless network.

The company has also expanded its product range. Last November Apple introduced two new iPhone models instead of one, the cheaper 5c and more high end 5s, a first for the company. It is now reportedly considering scrapping the 5c and launching an iPhone with a larger screen, like many of it rivals.

It also released two new iPads last year and added NTT Docomo as a carrier partner in Japan, which helped fuel record sales up from 22.9 million last year. The company also sold 4.8 million Mac computers, up from 4.1 million last year.

On a conference call, the company said America continues to be Apple’s largest sales segment, but its dominance is declining in percentage terms. Revenue in the Americas fell 1% to $20.1bn in the quarter, down from $20.3bn. Sales in China, Hong Kong and Taiwan rose 29% and Japan rose 11%. Sales in the rest of the Asia-Pacific region fell by 9%; sales rose in Europe by 5%.

Apple forecast fiscal second-quarter revenue of between $42bn and $44bn, also below the $46bn analysts had been predicting in the period, the first full quarter to include results from the China Mobile pact.

Apple’s chief financial officer, Peter Oppenheimer, has said the company has been struggling to keep up with sales of the iPhone 5s

“We continue to invest heavily in the future and remain confident in our product pipeline,” Oppenheimer said, in a call with analysts.

Gross margins, a closely watched measure of the percentage of revenue that remains after manufacturing costs, was 37.9% in the December quarter, down from 38.6% in the year-ago period but higher than forecast. For the March quarter, Apple forecast a gross margin of 37% to 38%.

Powered by article was written by Dominic Rushe in New York, for on Monday 27th January 2014 23.56 Europe/London © Guardian News and Media Limited 2010


image: © Daniel Dudek-Corrigan