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Apple's stock is falling as well

Apple managed to beat and meet Wall Street's expectations when it comes to fiscal 2013 fourth quarter revenue and iPhone sales respectively, but the tech giant sees a stronger holiday season ahead. 

For the fiscal 2013 fourth quarter ended September 28, Apple reported revenue of $37.5 billion, beating analyst expectations of $36.8 billion. Net profit came in at $7.5 billion ($8.26 per share), which beat expectations of $7.94 per share. In the year-ago quarter, revenue sat at $36 billion and net profit was $8.2 billion. Gross margin was 37 percent compared to 40 percent in the year-ago quarter.

A big question has been the number of iPhones sold, since this was the first iPhone launch that included two versions: the iPhone 5S and the iPhone 5C. Apple said it sold 33.8 million iPhones for the quarter, which beat analyst expectations of 31 million. It's not yet clear how many of those were 5S' and 5Cs, but it definitely beat the year-ago quarter's 26.9 million iPhone sales. 

The iPad didn't quite meet expectations with 14.1 million sold (Wall Street predicted 14.5 million). Apple sold 14 million in the year-ago quarter. 

According to Business Insider, the average selling price (ASP) for the iPhone and iPad is falling, meaning lower profit per unit sold. IPhone ASP is $577, down from $581 in the June quarter and $613 in the March quarter while the iPad's ASP is $439.


Macs fell in line with analyst estimates with 4.6 million sold for the quarter, but dropped from 4.9 million sold in the year-ago quarter. 

Looking ahead at the holiday quarter, Apple predicts revenue of $55 billion to $58 billion compared to analyst estimates of $55.65 billion, and gross margin of 36.5 to 37.5 percent.

Apple's stock fell as much as 3.85 percent in after hours trading, and was down 2.35 percent 20 minutes after the earnings report was released. 

“We’re pleased to report a strong finish to an amazing year with record fourth quarter revenue, including sales of almost 34 million iPhones,” said Tim Cook, Apple CEO. "We’re excited to go into the holidays with our new iPhone 5c and iPhone 5s, iOS 7, the new iPad mini with Retina Display and the incredibly thin and light iPad Air, new MacBook Pros, the radical new Mac Pro, OS X Mavericks and the next generation iWork and iLife apps for OS X and iOS.” 

As Cook said, Apple has a slew of new products that it hopes to sell throughout the holiday season. It launched the flagship iPhone 5S and "budget" iPhone 5C in September, which are priced starting at $650 and $550 respectively without subsidized pricing. Many analysts have worried that Apple hasn't priced its supposed budget phone low enough to catch on in markets like China, where there is no subsidized pricing. Many consumers have opted to pay the extra $100 to have the flagship model instead of the low-end iPhone, leading to a cut in 5C orders and a boost in 5S orders for the holiday season. 

Apple also introduced the new iPad Air and iPad mini with Retina Display this month starting at $499 and $399 respectively. 

Source: Apple





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