Apple failed to set an all-time revenue record in the last three months of co-founder Steve Jobs’ life. Its financial results came in below expectations on Tuesday – a rare miss for the company.
After several record quarters, the July-to-September period saw Apple biding its time, with no new iPhone or iPad releases. Earnings and revenue rose from last year at rates that would be the envy of any large company, but investors had expected the seemingly unstoppable company to do even better.
Net income in the fiscal fourth quarter was $6.62 billion, or $7.05 per share. That was up 54% from $4.31 billion, or $4.64 per share, a year ago. Analysts polled by FactSet were expecting $7.28 per share.
Revenue was $28.3 billion, up 39%. Analysts were expecting $29.4 billion. Even though it wasn’t an all-time record, it was the highest for the July-to-September quarter.
Tim Cook, the new CEO, told analysts on a conference call that China continues to be the fastest-growing market for the company. In the latest quarter, sales were up nearly four times from last year and made up one-sixth of Apple’s overall sales.
“It’s an area of enormous opportunity… The sky’s the limit in there,” Cook said.
Apple sold 17.1 million iPhones in the quarter, which ended Sept. 24. That was well below analyst expectations and the 20.3 million sold in the third quarter.
IPhone buyers had been waiting for a new model, which launched Friday after the quarter had ended. Still, analysts had expected the older models to keep more of their appeal.
Compared with the same period last year, iPhone sales were up 21%. That’s strong, considering that the iPhone 4 was brand new last year.
Laptops were Apple’s strongest category in the quarter, with sales up 30% from the previous quarter thanks to the release of a new operating system, Lion. Total Mac sales set an all-time record at 4.9 million. Apple’s figures are bucking the trend for the PC market in general, which is seeing anemic growth.
Apple’s forecast for the current quarter was more pleasing to investors. It said it expects earnings of $9.30 per share and revenue of $37 billion. Apple usually low-balls its forecasts, and analyst figures are usually higher. But in this case, analysts have had lower figures, expecting earnings of $9 per share and revenue of $36.7 billion.
In the full fiscal year, Apple earned $25.9 billion, or $27.68 per share. That was up 85 per cent from the previous year. Revenue was $108 billion, up 66%.
Apple’s stock fell $28.26, or 6.7%, to $393.98 in afterhours trading following the release of results. That wiped out one week of gains. At the close of regular trading, it was the world’s most valuable company, but the stock drop means it’s yielding the position to Exxon Mobil Corp.
Jobs relinquished his position as CEO in August, after going on medical leave in January. He died Oct. 5 after years of battling pancreatic cancer.
