backtop


Print 94 comment(s) - last by Argon18.. on Jan 28 at 1:27 PM


  (Source: Goodfon)
Apple's profit is flat due to higher manufacturing costs

While Apple managed to surpass analysts' profit forecasts for the fiscal 2013 first quarter, the company's stock took a tumble as investors worry over Apple's ability to maintain steady growth with new products.

Apple reported a revenue of $54.5 billion for the quarter ended December 29, 2012, compared to $46.33 billion in the year-ago quarter. The tech giant just missed analyst expectations of $54.73 billion.

Apple also earned a net profit of $13.1 billion ($13.81 a share) compared to $13.1 billion ($13.87 a share) a year ago. Profit clearly remained pretty flat, but it exceeded analysts' expectations of $13.44 a share.

The iDevice maker also noted that it had record iPhone sales for the quarter at 47.8 million (compared to 37 million in the year-ago quarter). It also had an uptick in iPad sales, from 15.4 million in the year ago quarter to 22.9 million in the most recent quarter.

“We’re thrilled with record revenue of over $54 billion and sales of over 75 million iOS devices in a single quarter,” said Tim Cook, Apple’s CEO. “We’re very confident in our product pipeline as we continue to focus on innovation and making the best products in the world.”

While Apple did okay for the quarter, investors are concerned with the company's flat profit due to higher manufacturing costs and also worry whether Apple can keep up its momentum with product popularity. Many new devices are hitting the market at lower prices and offer newer, better features. For instance, the iPad's market share was bested by Google's Nexus 7 tablet in Japan mainly due to cost differences.

Apple's stock has lost nearly 25 percent of its value since September 2012 ($170 billion in market value).

In after-hours trading today, Apple's stock fell over 10 percent.

Looking forward to fiscal 2013 second quarter, Apple expects a revenue of between $41 billion and $43 billion.

Earlier this month, it was reported that Apple had cut iPhone screen and component orders by 50 percent for the first quarter of 2013.

Source: Apple



Comments     Threshold


This article is over a month old, voting and posting comments is disabled

By TakinYourPoints on 1/23/2013 8:25:24 PM , Rating: 2
quote:
If I sell 100 lollipops at a dollar each, and it takes a dime to make them, I make 90 dollars.

If next year, I sell 115 lollipops at a dollar each, but it takes 20 cents to make them, I'm only making 92 dollars. I've experienced growth (15%), but I'm hardly making any more money. Growth is great for market share, but it means nothing for profits if manufacturing costs offset it.


Ding ding, nailed it.

iPhones cost more to make than the previous model, offsetting how increasingly popular they are. The popularity of the lower profit iPad Mini eating into regular iPad sales is also to blame here. I don't think that'll go away either, not when iPad Minis will eventually double display resolution, keeping its profit margins low.

A massive increase in revenue ($55BN, wtf) with a reduction in margins resulting in the same profits as the prior year is a negative thing.

Looks like they won't be reaping the rewards of the iPhone until the 5S comes out. The exact same thing happened between the iPhone 4 (reduced profits on new hardware) and the iPhone 4S (increased profit on mature product).


"Nowadays, security guys break the Mac every single day. Every single day, they come out with a total exploit, your machine can be taken over totally. I dare anybody to do that once a month on the Windows machine." -- Bill Gates














botimage
Copyright 2014 DailyTech LLC. - RSS Feed | Advertise | About Us | Ethics | FAQ | Terms, Conditions & Privacy Information | Kristopher Kubicki