Apple’s quarterly earnings are still sagging even as sales of its iPhones are rising, a vexing phenomenon feeding investor worries about whether stiffer competition in the mobile device market will continue to undercut the company’s prosperity.
The fiscal fourth-quarter results announced on Monday closed the books on a sobering year that saw Apple’s market value plunge by about 25%, or about $160 billion. Apple remains the world’s most valuable company, despite the downturn.
The company’s earnings have been shrinking along with its share of the smartphone and tablet computer market that Apple reshaped with the 2007 release of the first iPhone and the 2010 introduction of the iPad. Apple hasn’t come up with another breakthrough product in a new category since then, raising questions about the company’s ability to innovate following the death of co-founder and chief visionary Steve Jobs two years ago.
Apple’s earnings have now fallen from the previous year in three consecutive quarters after a decade of steady growth. The company earned $7.5 billion, or $8.26 per share, during the three months ending September 28. That compared to income of $8.2 billion, or $8.67 per share, last year.
The latest quarterly earnings topped the average estimate of $7.92 per share among analysts polled by FactSet.
Revenue rose 4% to $37.5 billion — about $600 million above analyst predictions.
Investors were evidently hoping for a better showing and, perhaps, a more optimistic forecast for the current quarter, which covers the crucial holiday shopping season. Management predicted Apple’s revenue will range from $55 billion to $58 billion in the quarter ending in late December. Analysts had projected revenue of $55.6 billion. Apple also indicated that its profit margins would be in the same range as the past quarter.
Activist investor Carl Icahn, who holds a 0.5% stake in Apple, is pressuring the company to spend $150 billion buying back its own stock in an effort to boost the price. His idea would more than double the $60 billion that Apple’s board has budgeted for buying back stock during the next three years.
Apple apparently doesn’t have any immediate plans to placate Icahn. CEO Tim Cook told
The fiscal fourth-quarter results announced on Monday closed the books on a sobering year that saw Apple’s market value plunge by about 25%, or about $160 billion. Apple remains the world’s most valuable company, despite the downturn.
The company’s earnings have been shrinking along with its share of the smartphone and tablet computer market that Apple reshaped with the 2007 release of the first iPhone and the 2010 introduction of the iPad. Apple hasn’t come up with another breakthrough product in a new category since then, raising questions about the company’s ability to innovate following the death of co-founder and chief visionary Steve Jobs two years ago.
Apple’s earnings have now fallen from the previous year in three consecutive quarters after a decade of steady growth. The company earned $7.5 billion, or $8.26 per share, during the three months ending September 28. That compared to income of $8.2 billion, or $8.67 per share, last year.
The latest quarterly earnings topped the average estimate of $7.92 per share among analysts polled by FactSet.
Revenue rose 4% to $37.5 billion — about $600 million above analyst predictions.
Investors were evidently hoping for a better showing and, perhaps, a more optimistic forecast for the current quarter, which covers the crucial holiday shopping season. Management predicted Apple’s revenue will range from $55 billion to $58 billion in the quarter ending in late December. Analysts had projected revenue of $55.6 billion. Apple also indicated that its profit margins would be in the same range as the past quarter.
Activist investor Carl Icahn, who holds a 0.5% stake in Apple, is pressuring the company to spend $150 billion buying back its own stock in an effort to boost the price. His idea would more than double the $60 billion that Apple’s board has budgeted for buying back stock during the next three years.
Apple apparently doesn’t have any immediate plans to placate Icahn. CEO Tim Cook told
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