Apple revenue, iPhone sales disappoint; shares dive

Wed Jan 23, 2013 6:43pm EST
 
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By Poornima Gupta

SAN FRANCISCO (Reuters) - Apple Inc missed Wall Street's revenue forecast for the third straight quarter as iPhone sales came in below expectations, fueling investors' worries that its dominance of the mobile industry was slipping.

Shares of the world's largest tech company fell 10 percent to $463 after-hours, wiping out some $50 billion of its market value from its $514 close.

On Wednesday, Apple said it shipped a record 47.8 million iPhones in the December quarter, up 29 percent from the year-ago period but below the 50 million shipments that analysts on average had expected.

"It's going to call into question Apple's dominance in the space. It's still one of the strong players, the others being Samsung and Google. It's still a two-horse race, but Android continues to grow rapidly," said Sterne Agee analyst Shaw Wu.

"If you step back a bit, it's clear they shipped a lot of phones. But the problem is the high expectations that investors have. Apple's conservative guidance highlights the concerns over production cuts coming out of Asia recently."

Apple projected revenue of $41 billion to $43 billion in the current, second fiscal quarter, lagging the average Wall Street forecast of more than $45 billion.

Fiscal first quarter revenue rose 18 percent to $54.5 billion, below the average analyst estimate of $54.73 billion, though earnings per share of $13.81 beat the Street forecast of $13.47, according to Thomson Reuters I/B/E/S.

Apple also undershot revenue targets in the previous two quarters, and these results will prompt more questions on what Apple has in its product pipeline, and what it can do to attract new sales and maintain its growth trajectory, analysts said.   Continued...

 
The Apple logo is pictured at the company's flagship retail store in San Francisco, California January 23, 2013. Apple results are due after market closes around worries about the profit potential in the tech sector, increased amid questions about waning demand for Apple Inc products and a weak outlook from Intel Corp last week. REUTERS/Robert Galbraith (UNITED STATES - Tags: BUSINESS LOGO)