Apple’s fiscal Q1 adds to doubts of Wall Street over growth potential
Print Edition
It’s going to take more than brisk sales of the iPhone and iPad to convince investors that Apple still has the magic touch.
Wall Street’s nagging doubts about Apple’s further growth prospects were magnified late on Monday with the release of the company’s results for a three-month period that encompassed the holiday shopping season.
Even though Apple sold more iPhones and iPads than in any previous quarter, the showing disappointed investors who were expecting even bigger things from the Cupertino, California, company.
The fiscal first-quarter numbers reinforced perceptions that Apple is now mostly selling its mobile devices to repeat customers who are upgrading to the next generation in the product line, instead of reeling in new converts to its technology. A similar problem also appears to be looming for Samsung Electronics, which competes fiercely against the iPhone.
“It looks like the high end of the smartphone market is becoming saturated,” said Gartner analyst Van Baker.
If that is true, Apple figures to be hard pressed to lift its stock back to where it stood at its peak price of more than US$700 in September 2012. That was before investors began to fret about fiercer competition in mobile devices and Apple’s lack of a breakthrough product since the iPad came out nearly four years ago.
Apple’s management amplified those concerns with a revenue forecast of US$43 billion for the current quarter ending in late March, falling about US$3 billion below analysts’ predictions.
The company’s projection also raised the unsettling specter of Apple’s quarter revenue declining from the prior year for the first time in more than a decade. It last happened during the opening three months of 2003.
Apple’s stock shed 8 percent in extended trading following the release of the earnings report.
Apple CEO Tim Cook sought to reassure investors during a Monday conference call. Without providing further specifics, he reiterated previous statements that Apple plans to plow new fields in technology.
“Innovation is deeply embedded in everybody here,” Cook said. “We have zero issue coming up with things we want to do that we think we can disrupt in a major way.”
Apple earned US$13.07 billion, or US$14.50 per share, in the quarter ending on December 28. That’s roughly flat from US$13.08 billion, or US$13.81 per share, in the prior year.
Revenue for the fiscal first quarter rose 6 percent to US$57.6 billion.
Analysts, on average, had expected Apple to earn US$14.09 per share on revenue of US$57.5 billion, according to FactSet.
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