Apple's fiscal third quarter featured the sort of eye-popping iPad and iPhone sales figures company watchers have become accustomed to. And yet, Apple shares are getting hammered in Tuesday after hours trading because the results did not meet Wall Street's expectations.
For the quarter ended June 30, Apple's revenue rose 22 percent to $35 billion and profit jumped 20 percent to $8.8 billion, or $9.32 per share.
However, consensus opinion of analysts polled by Thomson Reuters had Apple reporting earnings of $10.36 per share and revenue of $37.18 billion. iPhone sales also dropped 26 percent compared to last quarter to 26 million units sold, or about two million fewer than analysts were anticipating.
Apple is expecting earnings of $7.65 per share and revenue of $34 billion for its current quarter, a far cry from the $10.26 per share and $38.1 billion that Wall Street analysts had earlier forecast.
Investors responded by sending Apple shares down more than five percent to $569.68 in after hours trading.
In a Q&A during Apple's earnings conference call, CEO Tim Cook acknowledged that rumors about the forthcoming iPhone 5 may have dampened iPhone sales during the quarter.
"We are reading the same speculation and rumors that you are," Cook said in response to a query about the iPhone sales miss. "We think this has caused some pause in customer purchasing."
Apple sold 17 million iPads during the quarter, up 44 percent from last quarter. Those figures did not include the launch of the new iPad in China, which took place last week. Apple has now shipped 84 million iPads since launching the product in 2010, reaching this figure three times as fast as it did with the iPhone, Cook noted.
"In terms of competition, we have seen hundreds of tablets come to market over the last year, and I have yet to see them gain what I could call any level of traction," Cook said during the Q&A. "We still think most customers feel they’re not really looking for a tablet -- they're looking for an iPad."
Apple sold 4 million Macs during the quarter, the same figure it posted last quarter and a growth of just two percent year-over-year.
Cook was also asked for an update on Apple TV, and replied that that Apple sold 1.3 million units in Q2 and 4 million units for the fiscal year so far.
"It's still at a level we would call a hobby. We'll see where it takes us, [but] we're not ones to keep around projects that we don't believe in," Cook said.
PUBLISHED JULY 24