Apple Beats Earnings, but Misses on iPhones and Guidance

Jacob Harper |

Apple (AAPL) reported earnings after the bell on Jan. 27 from their headquarters in Cupertino, Ca. on the critical 2013 holiday shopping season. While the company beat top and bottom line expectations and exceeded iPad and iMac sales, the tech giant missed expectations on their flagship iPhone product, sending shares southward after market.

Despite the support of industry stalwart Carl Icahn, and a rumored deal with China Mobile, Apple could not overcome the shortfall on iPhone sales. Apple themselves positioned the iPhone as being the most important aspect of the earnings report when they released two iPhones simultaneously in September – the upmarket 5S and the emerging/youth-targeted 5C. The two-tiered product release put the focus back on the product line that first turned Apple into the megaforce it is today, and ended up biting them in spite of otherwise solid sales numbers.

From a nuts and bolts perspective, Apple had a fantastic holiday season. The company bested EPS and revenue estimates handily, and moved 2 million more iPads than conservative estimates. However, the company did also post lower March quarter guidance than expected, calling for revenues to fall in the $42-44 billion range, as opposed to the $45.7 billion analysts had previously surmised.   

The company maintained its $3.05 a share dividend, which will be paid out on Feb. 13 to shareholders of record as of Feb. 10.

Apple sold 51 million iPhones, which missed estimates on 54.7 million by 3.7 million units. The company bested iMac predictions, moving 4.8 million computers against estimates of 4.6 million. iPad sales clocked in at 26 million in the quarter against expectations of 24 to 25 million.

For their first quarter 2014 earnings report, Apple reported a net gain of $13.1 billion, or $14.50 per share, versus the net gain of $13.1 billion, or $13.81 per share, from the same period a year ago. Revenue for the quarter was $57.6 billion, as compared to $54.5 billion from the previous year. Analysts were expecting a net gain of $14.09 per share on revenues of $57.5 billion.

Apple shares dropped over 8 percent in after market trading to hit $506 a share. As a comparison, when the company reported Q4 earnings in October, shares dipped about 2 percent to $520 per share in after hours trading.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
AAPL Apple Inc. 113.95 1.83 1.63 34,402,627
FIISO Financial Institutions Inc. 8.48% Cl B pfd ser B-1 107.88 0.00 0.00 0

Comments

Emerging Growth

New Age Farm Inc.

New Age Farm Inc is engaged in the development of the agriculture based business in Langley, British Columbia.

Private Markets

Lyft

Lyft matches drivers using their own personal vehicles with passengers who request rides through the smartphone app, and the passengers pay automatically through the app. When using Lyft, passengers have…

8tracks

Our mission is to be the best place for people who care about music to create and discover thoughtfully curated playlists. In essence, 8tracks is a platform for online mixtapes.