Apple came in below expectations today in its quarterly earnings report, fueling the recent pessimism that has sent the company’s share prices down 27% since last September, Bloomberg reports.
The piece reports: “Profit was little changed at $13.1 billion, or $13.81 a share, in the period that ended Dec. 29, Cupertino, California- based Apple said today in a statement. Sales rose 18 percent 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. Shares fell as much as 5.6 percent in late trading.”
Speculation continues that higher production costs, tougher competition and a slowdown in expansion of the worldwide smartphone market are driving down Apple’s growth, the story notes.
“Investors are looking to Chief Executive Officer Tim Cook to demonstrate Apple has more blockbuster products in the pipeline to reignite sales,” Bloomberg notes.
Shaw Wu, an analyst with Sterne Agee & Leach Inc., is quoted as saying: “It’s going to call into question whether we have seen the peak of Apple. 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 report adds: “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.”