Apple shares fall after iPhone sales miss forecasts
- 19 October 2011
- From the section Business
The world's most valuable technology company, Apple, has reported an 85% rise in its full-year results.
Net profit for the year ending 24 September was $25.9bn (£16.5bn).
However, its shares fell more than 5% in after-hours trading after fourth quarter iPhone sales were weaker than experts predicted. The new 4S model was launched after the period.
Overall revenues totalled $28.27bn for the three months. That was more than $1bn shy of Wall Street forecasts.
It is the first time that Apple has missed analysts' sales forecasts since 2008.
During a conference call, chief executive Tim Cook suggested demand for the iPhone 4 had been dampened by rumours that a new model was about to be released.
"The reduction happened largely in the back half of the quarter as the speculation hit extreme highs," said Mr Cook.
"However, we're thrilled to be shipping the new iPhone 4S... and we're very confident that we will set an all-time record in the December quarter for iPhone sales."
Apple sold 17.1 million iPhones in the last quarter. That was a 21% increase on the same period last year, but analysts had expected sales of 20 million.
The firm said handset orders had also been affected by a decision to delay new partnerships.
"We opted to defer adding new carriers or countries during the September quarter knowing that we would launch the iPhone 4S very early in the October month, and we wanted to launch our new carriers with our latest products so we waited," said chief financial officer, Peter Oppenheimer.
The post-Jobs era
The earnings are the first to be released by Apple since the death of its co-founder Steve Jobs.
Mr Cook marked the occasion by paying tribute to his predecessor.
"Steve was a great leader and mentor and inspired everyone at Apple to do extraordinary things," he said.
"I'd like to take this opportunity to express our gratitude for all of the condolences and expressions of support that we have received following Steve's passing."
Despite the iPhone figures Apple said it was "thrilled" by the results.
It sold 11.12 million iPads over the latest quarter, which was a 166% rise on the same period last year.
Sales of the Mac computers totalled 4.89 million, a 26% rise and an all-time record.
Mr Cook said he was particularly excited by China, where sales are growing at a "feverish" pace.
Greater China revenue accounted for 16% of Apple's revenue in the fourth quarter, up from 2% in 2009.
"Certainly in my lifetime, I've never seen a country with as many people rising into the middle class that aspire to buy products that Apple makes," Mr Cook said.
He said the company was also focussing on Brazil where sales had increased 118% over the past year, topping $900m.
Apple warned that the recent flooding in Thailand might cause it problems sourcing hard discs and components for its Macs.
"I'm virtually certain there will be an overall industry shortage of disc drives as a result of the disaster," said Mr Cook.
"How it affects Apple? I'm not sure."
Analysts are split over whether the after-hours sell-off was overdone.
"The numbers came in weak. They need to set records every time they report to keep up the momentum," said Colin Gillis, analyst at BGC Partners.
But Shaw Wu, an analyst at Sterne Agee, said: "The numbers are actually quite good. The reason why the stock is off... I think some of the analysts got carried away."