Originally published Monday, July 21, 2008 at 12:00 AM
Apple profit jumps 31%, but stock punished
Macintosh and iPod sales helped boost Apple's fiscal third-quarter earnings 31 percent, beating Wall Street's expectations, but investors...
The Associated Press
Macintosh and iPod sales helped boost Apple's fiscal third-quarter earnings 31 percent, beating Wall Street's expectations, but investors pummeled the stock after Apple said profit margins contracted and the company issued soft guidance for the current quarter.
Cupertino, Calif.-based Apple said today it earned $1.07 billion, or $1.19 a share, 11 cents ahead of Wall Street's expectations, according to a Thomson Financial survey of analysts.
Revenue jumped 38 percent to $7.46 billion, ahead of analysts' average view for $7.37 billion in sales.
Apple said it shipped more Macs in the quarter than ever before — 2.5 million, up 41 percent from a year ago, with desktop shipments growing faster than laptops. Apple also said iPod shipments jumped 12 percent.
During a conference call, Chief Financial Officer Peter Oppenheimer said sales from U.S. stores rose faster than revenue overall, despite economic turmoil wrought by the domestic mortgage and credit crises.
Steve Jobs, Apple's chief executive, did not join the conference call with investors as he commonly does, prompting an analyst to inquire about his health. Jobs has survived pancreatic cancer.
"He has no plan to leave Apple," Chief Financial Officer Peter Oppenheimer responded. "Steve's health is a private matter."
Oppenheimer said in an interview that "the quarter was a home run," but at first glance, investors disagreed. Shares sank $10.40, or 6.3 percent, to $155.89 in after-hours trading, after gaining $1.34 to close at $166.29 in the regular session.
Investors might have been eyeing the decline in Apple's gross margin to 34.8 percent from 36.9 percent in the year-ago quarter.
Or they could have been spooked that Apple issued a conservative outlook for the current fourth quarter, though the company often does so. Apple predicted profit of $1 a share on $7.8 billion in sales, well short of Wall Street's expectations. Analysts had been expecting Apple's fourth-quarter earnings to reach $1.24 a share on $8.32 billion in sales.
Copyright © 2008 The Seattle Times Company
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