In its fiscal fourth-quarter financial summary released today, Apple announced record revenue of $36 billion and net profit of $8.2 billion. Compared to one year ago, revenue for the same quarter increased by 27 percent—nearly $8 billion—and net profit rose by $1.6 billion, a 24.2-percent jump.
Amazingly, Apple sold 26.9 million iPhones for the quarter, which ended Sept. 29. Sales of the popular mobile device were up 58 percent, even as Apple has been unable to keep up with demand of the iPhone 5, released Sept. 21.
In fact, when the product sold 5 million units in its first week, many analysts began preparing new projections. Their calculations were soon complicated by Apple’s struggles to fulfill product demand.
“I’m not projecting whether (iPhone) supply and demand will balance in the current quarter,” Apple CEO Tim Cook said in a conference call.
The company’s sales of iPads were also up 26 percent compared to a year ago, and Mac sales increased 1 percent. Ipod sales suffered, however, dropping 19 percent in year-over-year sales.
Still, with $8.2 billion in profits, Apple earnings fell short of analyst’s expectations—$8.67 a share on $36 billion in revenue compared to the $8.75 a share on $35.8 billion Thomson Reuters forecast, marking the third consecutive quarter Apple earnings have missed expectations.
Based on the trend, Apple is surprising many on Wall Street by projecting holiday quarter earnings of $11.75 a share on revenue of $52 billion for the current period. Evercore Partners analyst Rob Cihra told the New York Times such earnings would only imply a gross profit margin of 36 percent, less than the 40 percent margin Apple just reported for the fourth quarter. The holiday season is generally the company’s biggest sales period of the year.
Although Apple typically makes conservative reports, it will have a record number of new products on the shelves this holiday season, including two new iPads in addition to the iPhone 5. Since production costs for new products are higher than for gadgets that have been in production for a while, profit margins are naturally lower, even if sales are up. In fact, Apple executives blamed the fourth-quarter profit decline on higher costs associated with its new products, which the company expects to account for 80 percent of its holiday revenue.
Gartner consumer technologies and market analyst Carolina Milanesi told USA Today she believes Apple’s next quarter will rival Samsung for the No. 1 spot on the smartphone market.
Apple is “certainly positioned to have the strongest holiday season yet,” Milanesi said.
Investors were disappointed upon hearing Apple’s quarterly results today. In fact, shares briefly fell below $600 following the announcement. The stock, which has fallen 13 percent since the iPhone 5 was released, became so volatile that Apple trading was temporarily halted just before the Company released its financial report.
Apple closed the day with NASDAQ at $609.54 a share, down $7.29, just more than 1 percent.
