Apple’s results fail to excite ahead of holiday quarter
Thursday, 31 October 2013 00:37
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REUTERS: Apple Inc’s profit and margins slid despite selling 33.8 million iPhones in its September quarter, prompting a brief but sharp selloff as disappointed investors cashed in some of the stock’s recent strong gains.
Wall Street had hoped for a stronger beat on quarterly sales after the company predicted in September that its revenue and margins would come in at the high end of its own forecasts.
CEO Tim Cook predicted a “really great” holiday shopping season in a conference call with analysts, a crucial time for Apple as its new iPads go up against Amazon.com Inc’s Kindle Fire and its new iPhones compete with lower-cost gadgets made by Samsung Electronics and other rivals using Google Inc’s Android software.
Significant backlog for 5S
Sources have said demand for Apple’s cheaper, brightly hued iPhone 5C lagged demand for the top-tier iPhone 5S, spurring concerns about the iPhone’s market positioning and its ability to compete with a growing profusion of lower-cost rivals.
Cook did not address the popularity of the 5C on his call with analysts but said there was “a very significant backlog” for the cutting edge 5S.
The world’s most valuable tech company said on Monday it expected revenue of $55 billion to $58 billion this quarter, outpacing Wall Street’s forecast for about $55.65 billion.
Gross profit margin for the fourth quarter was 37%, down from 40% a year ago as intense competition from the likes of Samsung Electronics took a toll. That was roughly level with analysts’ average 36.9% forecast.
Hard-pressed to fend off rivals
The company is increasingly hard-pressed to fend off rivals. Research house Strategy Analytics estimated on Monday that Apple’s market share slipped to 13.4% in the calendar third quarter from 15.6% previously, while Samsung led the market with 35.2%.
Billionaire Carl Icahn, who owns 4.7 million Apple shares, has led the charge, demanding the company initiate a tender offer to buy back $150 billion of its stock.
Cook told analysts the company will continue to seek shareholder input on its capital return program, and will announce any changes in the first part of the new calendar year.
Apple said it sold 33.8 million iPhones last quarter, roughly in line with analyst expectations for 33 million to 36 million.
It sold 14.1 million iPads during the quarter, up very slightly from 14 million in the year-ago quarter, and moved 4.6 million of its Mac computers, down from 4.9 million a year ago.
