Apple Inc. (AAPL: Quote) said Tuesday after the markets closed that its third quarter profit rose 21% from last year, driven by continued strong sales of its iPhones and iPad multimedia devices.
However, the company's quarterly earnings per share missed analysts' estimate by a big margin as did its quarterly revenue.
At the same time, the world's most valuable company forecast fourth quarter revenue and earnings well below analysts' current consensus estimates.
"We're thrilled with record sales of 17 million iPads in the June quarter," said Tim Cook, Apple's CEO. "We've also just updated the entire MacBook line, will release Mountain Lion tomorrow and will be launching iOS 6 this Fall. We are also really looking forward to the amazing new products we've got in the pipeline."
Apple shares are currently losing 5.03% in after hours trading after closing the day's regular trading session at $600,92, down $2.92. The shares trade in a 52-week range of $353.02 to $644.00.
Apple's disappointing results were mainly due to slowing sales of iPhones. iPhone sales rose 28% year-over-year to 26.0 million units in the third quarter, missing estimates of some analysts. Some analysts attributed this weakness to the fact that consumers may have been holding back on buying iPhones now in order to wait for the next product upgrade, which is expected sometime in the fall.
On the other hand, iPad sales jumped 84% to 17.0 million units in the quarter, topping analysts' expectations.
Apple revolutionized the mobile computing market when it introduced the iPad in April 2010. The company introduced the second generation of the device, iPad 2, in March last year.
And in March this year, the company released the third version of the device called "new iPad". The latest version of iPad comes with a new faster A5X chip, sharper screen resolution, and an improved 5 megapixel camera. The new iPad also supports the 4G LTE wireless connectivity.
The iPad has been extremely popular ever since its initial launch. Although several companies have launched their tablets, none has been able to match the popularity and saleability of Apple's iPad.
Apple sold 4 million Macintosh computers during the third quarter, up 2% from the year-ago quarter.
Third quarter sales of the company's iPod music players dropped 10% to 6.8 million units in the quarter.
Continued stronghold on the smartphone and tablet market, robust earnings growth and the company's huge cash horde have stoked investor enthusiasm for Apple shares, which hit an all time high of $644.00 on April 10.
Brian White, an analyst at Wall Street brokerage Topeka Capital Markets, has predicted that Apple shares will touch the $1,001 mark in the next twelve months.
On February 29, Apple became only the sixth company ever to cross $500 billion in market value. Only Microsoft, Cisco, General Electric, Intel and Exxon Mobil have ever entered this exclusive club, but none of them were able to maintain the position for long. when its stock market value topped the mark.
Cook took over as chief executive officer on August 24, succeeding the charismatic Steve Jobs. A little more than a month later, Jobs passed away on October 5.
For the third quarter ended June, 2012, the Cupertino, California-based computing and electronics company reported net income of $8.82 billion or $9.32 per share, compared to $7.31 billion or $7.79 per share for the year-ago quarter.
On average, 42 analysts polled by Thomson Reuters expected the company to earn $10.36 per share for the third quarter.
Gross margin for the quarter improved to 42.8% from 41.7% in the prior year quarter, while operating margin for the quarter increased to 33.0% from 32.8% a year earlier.
Net sales for the third quarter rose 23% to $35.02 billion from $28.57 billion in the same quarter last year. International sales accounted for 62% of the quarter's revenue. Forty-three analysts had a consensus revenue estimate of $36.81 billion for the second quarter.
Looking forward to the fourth quarter, the company forecast revenue of about $34 billion and earnings of about $7.65 per share. Analysts currently expect the company to earn $10.22 per share on revenue of $38.00 billion for the fourth quarter.
Apple also declared a cash dividend of $2.65 per share, payable on August 16 to shareholders of record on August 13.
In mid-March, Apple announced plans to again start paying quarterly dividends, and also set a $10 billion share repurchase program. The company paid its last dividend in December 1995.
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by RTT Staff Writer
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