Apple reported first-quarter sales below analysts’ predictions last night, adding fuel to investor pessimism that has sent shares down 27 per cent since September.
Profit was little changed at $13.1 billion, or $13.81 a share, in the period that ended December 29th, California-based Apple said last night in a statement. Sales rose 18 per cent to $54.5 billion.
Analysts had predicted profit of $13.53 a share on revenue of $54.9 billion, the average of estimates compiled by Bloomberg.
The results bolster speculation that Apple’s growth may be ebbing amid higher production costs, stiffer competition from rivals such as Samsung Electronics and slowing expansion in the global smartphone market.
Investors are looking to chief executive officer Tim Cook to demonstrate Apple has more blockbuster products in the pipeline to reignite sales.
“It’s going to call into question whether we have seen the peak of Apple,” said Shaw Wu, an analyst with Sterne Agee and Leach.
“One quarter can’t answer that question, but the concern will be heard louder until proven otherwise, and that will weigh on the stock.”
The lack of profit growth reflects higher manufacturing costs due to a product lineup overhaul ahead of the holiday shopping season.
The first quarter is usually Apple’s most lucrative, and the company introduced the iPhone 5, iPad-mini and restyled Mac to draw customers.
Sales of the iPhone, Apple’s biggest source of revenue and profit, reached 47.8 million units, matching the prediction by analysts surveyed by Bloomberg. The company also sold 22.9 million iPads, above the projected 22.4 million units.
For the fiscal second quarter, which is now under way, Apple forecast sales of $41 billion to $43 billion. That compares with predictions by analysts for revenue of $45.5 billion. The company did not provide a profit forecast. – (Bloomberg)
