SAN FRANCISCO: Apple Inc easily surpassed profit and revenue forecasts again but supply bottlenecks curbed iPad sales to below Wall Street's bullish targets, sending its shares more than 6 percent lower on Monday, Oct 18.
Weaker-than-projected gross margins and iPad shipments disappointed investors who had expected more from a company that had smashed Wall Street's targets in each of the past eight quarters.
Some analysts said sales of the iPad, which began only in April, should ramp up in the current quarter as the company resolves hitches in the supply chain.
"iPads were low, but I also think they had a lot of production problems getting that off the ground. So I don't think that really is a good demand indicator for iPad," said analyst Jane Snorek of First American Funds.
"Ipad demand is red hot and they can sell as much as they can make."
Gross margins in the fiscal fourth quarter came to 36.9 percent, a tad below Wall Street's average forecast of 38.2 percent.
Apple sold 4.2 million iPads in its second quarter on the market, below Wall Street's expectations. Some analysts had projected shipments of closer to or even more than 5 million for the tablet computer launched only in April, but others had warned that supply constraints had held back sales.
The company on Monday reported a net profit of $4.31 billion, or $4.64 a share, in the fiscal fourth-quarter ended Sept. 25, up from $2.53 billion, or $2.77 cents a share, in the year-ago period.
That was better than the average analyst estimate of $4.08 a share, according to Thomson Reuters I/B/E/S.
"It's an incredible phenomenon -- not only did they beat our heightened expectations but they've blown past forecasts, and it's primarily driven by the iPhone," said BGC's Colin Gillis.
Revenue surged 67 percent to $20.3 billion, ahead of Wall Street's target of $18.9 billion.
The company forecast current-quarter earnings of $4.80 a share on revenue of $23 billion.
Shares of Cupertino, California-based Apple slid more than 6 percent to $297.80 in extended trading, after a brief trading halt. They closed at $318.00 on Nasdaq.- Reuters
Weaker-than-projected gross margins and iPad shipments disappointed investors who had expected more from a company that had smashed Wall Street's targets in each of the past eight quarters.
Some analysts said sales of the iPad, which began only in April, should ramp up in the current quarter as the company resolves hitches in the supply chain.
"iPads were low, but I also think they had a lot of production problems getting that off the ground. So I don't think that really is a good demand indicator for iPad," said analyst Jane Snorek of First American Funds.
"Ipad demand is red hot and they can sell as much as they can make."
Gross margins in the fiscal fourth quarter came to 36.9 percent, a tad below Wall Street's average forecast of 38.2 percent.
Apple sold 4.2 million iPads in its second quarter on the market, below Wall Street's expectations. Some analysts had projected shipments of closer to or even more than 5 million for the tablet computer launched only in April, but others had warned that supply constraints had held back sales.
The company on Monday reported a net profit of $4.31 billion, or $4.64 a share, in the fiscal fourth-quarter ended Sept. 25, up from $2.53 billion, or $2.77 cents a share, in the year-ago period.
That was better than the average analyst estimate of $4.08 a share, according to Thomson Reuters I/B/E/S.
"It's an incredible phenomenon -- not only did they beat our heightened expectations but they've blown past forecasts, and it's primarily driven by the iPhone," said BGC's Colin Gillis.
Revenue surged 67 percent to $20.3 billion, ahead of Wall Street's target of $18.9 billion.
The company forecast current-quarter earnings of $4.80 a share on revenue of $23 billion.
Shares of Cupertino, California-based Apple slid more than 6 percent to $297.80 in extended trading, after a brief trading halt. They closed at $318.00 on Nasdaq.- Reuters
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