Apple shares tumble despite new revenue high
By Glenn Chapman, AFP Wednesday, January 29, 2014, 12:08 am TWN
SAN FRANCISCO--Record iPhone and iPad sales pushed Apple quarterly revenue to a new high but shares tumbled Monday over concerns of weaker profits ahead in fierce mobile gadget markets.
The California-based tech giant reported net income of US$13.1 billion on revenue of US$57.6 billion in the quarter that ended December 28, helped by selling 51 million iPhones.
The profit was the same as Apple reported in the same quarter a year earlier when its revenue was US$54.5 billion.
Apple shares fell more than seven percent to US$506.75 in after-hours trade on a weaker-than-expected outlook ahead.
While Apple profit beat Wall Street expectations, shares were "trading down" largely due to "disappointing" guidance that revenue will drop in the current quarter despite the benefits of launching the iPhone last week on China's largest telecom network, RBC Capital Markets said in a note to investors.
"China Mobile has more subscribers than anyone in the world," Apple chief Tim Cook said during an earnings call when asked about the iPhone launch on that network.
"I do see it as a watershed moment for Apple and have a very strong belief in the ability of the two companies to do great things together."
Apple said it sold 26 million iPads during the quarter, also an all-time quarterly record, as well as 4.8 million Macs.
"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," Cook said.
While Apple remains the most valuable and among the most profitable companies, some analysts are concerned it is losing its edge and failing to keep up with rivals in the smartphone and tablet markets.
"Some of the shipments may be records, but Apple shares are taking it on the chin here. Sometimes great is not great enough," said Jon Ogg at 24/7 Wall Street.
Apple profit topped Wall Street forecasts, but Apple's outlook for the current quarter is less than was expected at between US$42 billion and US$44 billion in revenue.
Apple has been facing pressure from billionaire Carl Icahn, which wants the company to boost the size of its share buyback to deliver more cash to shareholders.
Apple is progressing on a plan to return US$100 billion to investors through dividends and repurchasing shares by the year 2016 and gave no indication it intended to expand the program.
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