Apple shares retreat after rare earnings miss

Jul 25, 2012 by PETER SVENSSON

(AP) — Apple's stock fell Wednesday after the company did something un-Apple-like: posting results below Wall Street expectations.

Late Tuesday, Apple Inc. reported that in the latest quarter, rose a mere 21 percent from the year before, not the 33 percent that analysts were expecting.

Apple is the world's most valuable company, and the earnings miss was only the second one in ten years.

In afternoon trading Wednesday, the shares were down $23.04, or 3.8 percent, to $577.91. The shares are down 10 percent from their all-time high of $644, hit in April.

The reaction was somewhat milder than the one that greeted the stock in October, the previous time Apple reported earnings that missed expectations. Then, the stock fell 5.6 percent the next day.

Apple executives said Tuesday that consumers appear to be holding off on buying iPhones before a new model comes out, even though it isn't expected until October. They also shifted their buying toward cheaper models of iPhones and iPads.

The company was also hurt by the strengthening dollar, which reduced the value of overseas sales, and by economic turmoil in Europe.

In a rare move for an analyst, Tavis McCourt at Raymond James downgraded Apple's from "Strong Buy" to "Outperform" on Wednesday, saying that while most of the miss was due to buyers delaying their purchases of iPhones, there are signs that the phone's gains in market share "might become more muted going forward."

He pointed to flat sales in Europe, where consumers are likely not waiting for the next iPhone, because they won't be able to take advantage of what's believed to be its signature feature: access to the latest U.S. high-speed data networks.

Apple is the third-largest maker of cellphones, according to research firm Gartner. It had a 7.9 percent share of the worldwide market in the first quarter, up from 3.9 percent a year earlier. Among smartphones, had a 23 percent share, up from 17 percent.

Explore further: Tesla shares jump on Musk 'tease' in tweet

0 shares

Related Stories

Apple stock hit by AT&T numbers

Apr 24, 2012

(AP) -- Apple shares slipped in early trading Tuesday after AT&T Inc., the largest seller of iPhones in the U.S., reported a sharp drop in first-quarter sales compared to the holiday quarter.

Apple shares soar, edges ExxonMobil in market cap

Jan 25, 2012

Apple shares soared on Wednesday following blockbuster quarterly earnings and the California gadget-maker leapfrogged over ExxonMobil to become the largest US company in terms of market value.

Apple doubles iPhone sales in 1Q (Update)

Jan 24, 2012

The iPhone is taking over Apple. For the first time, the device that changed how people use mobile phones, accounts for more than half of the behemoth company's sales.

Recommended for you

Tesla shares jump on Musk 'tease' in tweet

8 hours ago

Tesla Motors shares jumped Monday after co-founder Elon Musk tweeted that the company would unveil as "major" new product line next month, leaving analysts guessing.

Amazon unveils move in local services

14 hours ago

US online giant Amazon said Monday it was launching a services marketplace offering to connect consumers with businesses offering anything from home improvement to piano lessons.

Intel in talks with Altera on tie-up

Mar 27, 2015

US tech giant Intel is in talks with rival Altera on a tie-up to broaden the chipmaker's product line amid growth in Internet-connected devices, the Wall Street Journal reported Friday.

User comments : 0

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.