Record sales but targets not met

Apple disappoints investors despite record sales. Photo by Reuters.
Apple disappoints investors despite record sales. Photo by Reuters.
Apple, the manufacturer of iPhones and iPads, reported a profit of $US1 billion a week in the first quarter of its financial year but was still punished by investors disappointed by the company not meeting targets.

Apple says record sales of iPhones drove revenues to new heights in the past quarter, resulting in a profit of $US13.1 billion ($NZ15.9 billion).

The California tech giant said it had record quarterly revenues of $US57.6 billion, helped by selling 51 million iPhones.

But Apple shares fell 5.7% at $US519.15 in after-hours trade on a weaker-than-expected outlook ahead.

The company said it sold 26 million iPads during the quarter to December 28, also an all-time quarterly record, as well as 4.8 million Macs.

Craigs Investment Partners broker Greg Easton said the market was upset because despite record iPhone sales, the company was still about six million sales short of expectations.

''The reason people were looking for more was because this is the best economy Apple has sold its products into ever. Also, it released the iPhone in China at the same time as the United States and everyone had good reason to expect higher sales.''

Apple was not innovating any more and was being likened to a car manufacturer which just revamped last year's model, Mr Easton said.

US phone companies were making it harder for customers to change their phones. In the past, customers could upgrade their phones at will but now they were finding the same conditions New Zealanders were used to of having to wait two years for an upgrade or pay for the phone.

Samsung Mobile was also not likely to meet sales targets. The market was becoming flooded with new models with no major changes.

''There is not much upside to Apple in the short term. It is generating cash and returning cash.''

The share price could be influenced by either an increased share buy-back or an increased cash dividend. The company carried $US159 billion of cash on its balance sheet, Mr Easton said.

Apple has been facing pressure from billionaire Carl Icahn, who wants the company to boost the size of its share buyback to deliver more cash to shareholders.

Apple chief executive Tim Cook said: ''We are really happy with our record iPhone and iPad sales, the strong performance of our Mac products and the continued growth of iTunes, software and services.

''We love having the most satisfied, loyal and engaged customers, and are continuing to invest heavily in our future to make their experiences with our products and services even better.''

Mr Easton said the profit of $US13.1 billion was unchanged from a year earlier and amounted to $US14.50 a share, better than analyst forecasts. But following the record sales, it showed Apple's margins had slipped in the period.

Apple's outlook for the current quarter, its second fiscal quarter, were below forecasts at between $US42 billion and $US44 billion in revenue.

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