Apple Inc. (AAPL: Quote) said Thursday after the markets closed that its fourth quarter profit rose 24% 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, but its quarterly revenue managed to beat analysts' forecast.
At the same time, the world's most valuable company forecast first quarter revenue and earnings well below analysts' current consensus estimates.
This marks the second consecutive quarter that the company's quarterly earnings missed analysts' expectations, and the company has given a downbeat forecast for the second time in a row.
"We're very proud to end a fantastic fiscal year with record September quarter results," said Tim Cook, Apple's CEO. "We're entering this holiday season with the best iPhone, iPad, Mac and iPod products ever, and we remain very confident in our new product pipeline."
Apple shares are currently losing 0.37% in after hours trading following a brief trading halt after closing the day's regular trading session at $609.54, down $7.29 or 1.18%. The shares trade in a 52-week range of $363.32 to $705.07.
Apple's disappointing results were mainly attributed to slowing sales of iPads. iPads sales rose 26% to 14.0 million units in its fourth quarter, missing estimates of some analysts. The company sold 17.0 million iPads during the previous quarter.
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 iPad has been extremely popular ever since its initial launch. However, it looks Apple is facing some competition particularly in the small tablets category such as Amazon.com, Inc.'s (AMZN) Kindle Fire.
Keeping this in mind, Apple on Tuesday unveiled a smaller version of its iPad tablet, called iPad mini, to make its presence felt in the small-tablet market as the holiday season nears. The the 7.9-inch iPad mini Wi-Fi only model will be available in the US at $329 for 16GB, $429 for 32GB, and $529 for 64GB.
According to research group IHS iSuppli, the market for 7-inch tablet is expected to double to 34 million worldwide in 2012. Apple is trying to cash on this market segment.
The company also unveiled an upgraded version of its iPad, called iPad 4th Generation, on Tuesday.
iPhones sales for the quarter jumped 58% to 26.9 million units, the company said.
Last month, the company started selling the latest version of its iPhone, called iPhone 5. However, the company faced strong criticism for phasing out Google Maps in favor of its own, deeply flawed, map application.
Nevertheless, Apple sold over five million of its new iPhone 5 within 3 days of its launch on September 21.
Apple sold 4.9 million Macintosh computers during the fourth quarter, up 1% from the year-ago quarter.
Fourth quarter sales of the company's iPod music players dropped 19% to 5.3 million units.
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 $705.07 on September 21.
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.
Cook took over as chief executive officer on August 24, 2011, succeeding the charismatic Steve Jobs. A little more than a month later, Jobs passed away on October 5.
Apple is also involved in a bitter legal battle with South Korea's Samsung Electronics Co. on patent infringement. The tech giants have filed at least 30 lawsuits against each other in at least 12 courts, nine countries, and four continents involving smartphone and tablet patents.
In early September, Apple won a case at the U.S. International Trade Commission brought by Samsung over patented technology in the iPhone and the iPad tablet computer, with ITC Judge James Gildea ruling that Apple did not violate patents owned by Samsung. The ruling is subject to review by a full International Trade Commission.
In a preliminary decision on Wednesday, a U.S. International Trade Commission judge determined that Samsung had infringed on four Apple patents related to smartphones and tablets. Nevertheless, Judge Thomas Pender did not find Samsung to have violated two other patents indicated in the complaint. The ruling is also subject to review by a full International Trade Commission.
For the fourth quarter ended September 29, 2012, the Cupertino, California-based computing and electronics company reported net income of $8.22 billion or $8.67 per share, compared to $6.62 billion or $7.05 per share for the year-ago quarter.
On average, 47 analysts polled by Thomson Reuters expected the company to earn $8.75 per share for the fourth quarter.
Gross margin for the quarter narrowed slightly to 40.0% from 40.3% in the prior year quarter, while operating margin for the quarter shrank to 30.4% from 30.8% a year earlier.
Net sales for the fourth quarter rose 27% to $35.97 billion from $28.27 billion in the same quarter last year. International sales accounted for 60% of the quarter's revenue. Forty-four analysts had a consensus revenue estimate of $35.80 billion for the fourth quarter.
Looking forward to the first quarter, the company forecast revenue of about $52 billion and earnings of about $11.75 per share. Analysts currently expect the company to earn $15.41 per share on revenue of $54.98 billion for the first quarter.
Apple also declared a cash dividend of $2.65 per share, payable on November 15 to shareholders of record on November 12.
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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