Apple blames rare miss on new iPhone anticipation, economy

Wed Jul 25, 2012 11:33am EDT
 
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Poornima Gupta

SAN FRANCISCO (Reuters) - Apple Inc results fell short of Wall Street's lofty expectations as a sagging European economy and a pause in iPhone sales ahead of a new version saw revenues slip from the previous quarter.

Shares fell more than 5 percent to $570.81 in late trade after the world's most valuable technology company - which beats expectations with near regularity - reported its second quarterly miss in less than a year.

Apple's suppliers also felt the pain. Shares of LG Display, Toshiba and Hon Hai sank between 5 and 7 percent.

The rare miss highlights how the Apple brand is becoming less resistant to the economic and product cycles that have plagued rivals.

"Clearly it was a disappointment," said Channing Smith, Co-Manager of Capital Advisors Growth Fund. "We expected a lot of consumers will probably delay their upgrade and their purchases until the iPhone 5 comes out. We saw a similar trend occur last year with the iPhone 4S."

Apple did post a 23 percent jump in revenue from the same quarter the previous year to $35 billion, but that was about $2 billion below Wall Street's average forecast.

Net income jumped 21 percent from a year earlier to $8.8 billion, or $9.32 a share, about 10 percent below expectations.

From the previous quarter, sales fell 22 percent in Asia-Pacific, outstripping a 3 percent to 6 percent drop in the Americas and Europe.   Continued...

 
Customers enter the Apple flagship retail store to purchase the new iPad in San Francisco, California in this March 16, 2012 file photograph. Shares in top Asian suppliers to Apple Inc took a hit on July 25, 2012 after the company's latest quarterly results missed expectations, although several recovered ground as investors looked ahead to the company's new products later this year. REUTERS/Robert Galbraith/Files