Apple's Bubble Bursting BigTime!!

Apple's Bubble Bursting BigTime!!

Posted in the China Forum


Brooklyn, NY

#1 Jan 24, 2013
Apple shares tank 10% on iPhone, revenue miss
Last Updated: 5:40 AM, January 24, 2013
Posted: 12:02 AM, January 24, 2013
Apple is more miss than hit.

The former high-flying tech firm reported record revenue and iPhone sales over the holidays — but records aren’t enough anymore for a company with slowing growth and greater competition.

“Apple used to blow away numbers,” said analyst Colin Gillis of BGC Partners.

Not this time. As a result, Apple shares, which closed in regular trading at $514.01, up 1.8 percent, fell as much as 10 percent after hours.

The record iPhone sales of 47.8 million weren’t good enough for investors wanting to see 50 million.

Apple sold 22.9 million iPads, another record, but the company made less money on each tablet because of last quarter’s release of the cheaper iPad mini.

Getty Images
Apple CEO Tim Cook
Apple made an average of $465 on each iPad sold last quarter, compared with the $570 average a year ago, according to its results.

The $54.5 billion in fiscal first-quarter revenue, another company best, missed analyst forecasts of $55 billion, while profit margins were down to 38.6 percent from 44.7 percent a year ago.

What’s more, Apple’s per-share earnings of $13.81 were down year over year — the first time in a decade — from $13.87.

Investors disappointed with last quarter’s results and guidance for the current quarter sent the shares down more than 10 percent in extended trading to $460.

The stock has been in a state of perpetual shock for the past four months — down 27 percent from its historic highs of more than $700, reached at the end of September.

In a conference call yesterday, Apple CEO Tim Cook tried to dispel speculation that the company is cutting orders for components because of less demand for its products.

Cook told analysts not to read too much into reports out of Apple’s supply chain.“It’s good to question the accuracy of any kind of rumor about build plans,” he said.

Apple said demand in the March quarter for products like the iPad mini was still strong.

Mac sales were also a sore point, at only 4.1 million last quarter, vs. 5.2 million the year before.

With so many areas of concern, Wall Street tried to glean whatever it could about Apple’s plans to reinvigorate the share price.

Apple CFO Peter Oppenheimer said the company, which already is making good on plans to return about $45 billion in cash to shareholders, continues to look for ways to provide investor value. Apple’s cash pile is still growing, and was up $23 billion last quarter to $137 billion.

Cook said he had faith in the company’s product pipeline and innovation potential, and reiterated Apple’s “immense interest” in television.

Apple watchers have been looking for a sign that the company can recapture the product revolutions that were typical when founder Steve Jobs was alive. A number of analysts have said Apple will build its own TV.

Whatever it is, the company is in need of a hit new product, Gillis said.“It’s time for a new revenue stream for Apple,” he said.“Also, it’s time to return some more of that cash to shareholders.”

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