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 per cent, or about $160 billion. Apple Inc. 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 California based company earned $7.5 billion, or $8.26 per share, during the three months ending September. That compared to income of $8.2 billion, or $8.67 per share, last year.
Revenue rose 4 per cent 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.
5S and 5C
Apple’s stock dipped $6.45, or about 1.2 percent, to $523.43 in extended trading after the numbers came out.
The latest quarter included early sales of the latest iPhones released last month.
The models consist of a 5S, a high-end version featuring a faster chip and a fingerprint reader, and the 5C, a slightly cheaper version that comes in a variety of brightly colored plastic cases. Apple didn’t specify how many of each of the new models sold during the final week of the quarter.
The company sold 33.8 million iPhones in the past quarter, a 26 per cent increase from the same time last year. But the prices for those iPhones averaged $577, a 7 per cent decrease from an average price of $618 a year ago.
Apple’s iPad sales edged slightly upward, with 14.1 million of the devices sold versus 14 million a year ago.
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