Apple stock fell sharply in after-hours trading on Monday and opened down Tuesday after the company released disappointing earnings, notably selling fewer iPhones than analysts expected.
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On the overall numbers, Apple’s first quarter results looked good. Sales rose to $57.6 billion, up nearly 6%, and earnings per share rose to $14.50 from $13.81, higher than Wall Street expected. As always, Apple is still raking in big bucks.
But 30 years after its first Mac debuted, the Cupertino computer maker has become dependent on the iPhone, and that’s where it fell short. Analysts and investors expected 55 million units sold in the holiday quarter, but Apple sold only 51 million. That’s still a record, but the company’s forecast for second quarter sales of between $42 and $44 billion was also lower than projected, especially with China Mobile, the world’s largest carrier, just now coming on line.
Apple CEO Tim Cook and CFO Peter Oppenheimer attributed the lower next quarter outlook to better supply/demand match during the heated holiday rush and fewer delays in rolling out new iPhones to other countries.
“iPhone sales were disappointing,” said Piper Jaffray analyst Gene Munster.
“Investors are becoming concerned with regard to 1) iPhone unit growth and 2) lack of product innovation,” wrote RBC Capital Markets analysts in a new note.
Others are willing to give Apple the benefit of the doubt. “Cook said Apple has plenty of disruptive ideas but needs to concentrate resources on the best opportunities. This approach has worked historically and fits with our belief in focus,” UBS analyst Steven Milunovich wrote.
For more, see Forbes’ Apple earnings liveblog by Connie Guglielmo.
Apple shares dropped over 8% in after hours trading on Monday and were trading down 6.82% as of 10:32am EST.