Tuesday, October 29, 2013

Apple Profits Slip Again Despite iPhone Launch

Apple Inc. reported its third consecutive quarter of earnings declines on Monday afternoon, though a pop in iPhone sales with the launch of new devices helped revenues come in higher than Wall Street had expected for the company’s fourth fiscal quarter, according to Marketwatch.

Investors still took a mixed reaction to the news, with Apple’s shares slipping about 0.8% in after-hours trades following the report and the company’s conference call to discuss the results. Apple’s shares have been on a run, jumping more than 25% in the last three months and closing Monday’s regular session up 0.7% to $529.88.

The main culprit in the reaction was Apple’s gross margin forecast for the current quarter. The midpoint of the guidance range — 37% — would be below the 38.6% that Apple reported in last year’s December quarter which had very similar product dynamics with a new iPhone model and new versions of the iPad and Mac computer lineup.

Apple says it still has a large backlog of orders for the iPhone 5S to work through. That device launched in the last week of the recent quarter.

The December quarter also includes the crucial holiday shopping season — and the launch of the new iPad Air and other products. Apple predicted revenue in a range of $55 billion to $58 billion. Wall Street had been expecting revenue of $55.5 billion for the period, according to FactSet.

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