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Apple Q1 outlook disappoints investors

Posted: 24 Jan 2008 ?? ?Print Version ?Bookmark and Share

Keywords:Apple outlook? company investors? Q1 forecast?

Apple Inc. reported financial results that company executives described as the best performance in its corporate history, but investors concerned about the company's less than rosy forecast drove down its shares 12 percent in after market trading.

Net profit at this U.S. company climbed 58 percent in the December quarter, to $1.6 billion, or $1.76 per share, up from $1 billion, or $1.14 per share, in the comparable year-ago quarter.

Revenue rose 35 percent in the latest quarter to $9.6 billion compared with $7.1 billion in the corresponding quarter of 2006. The company exceeded analysts' average revenue and net income estimates.

Apple recorded strong shipments of Macintosh computersup 44 percent year-over-yearand said it sold more than 22 million iPods during the quarter. Apple also shipped 2.3 million iPhones.

"We're thrilled to report our best quarter ever, with the highest revenue and earnings in Apple's history," said Steve Jobs, Apple's CEO in a statement. "We have an incredibly strong new product pipeline for 2008, starting with MacBook Air, Mac Pro and iTunes Movie Rentals in the first two weeks."

While Apple's latest quarterly results were impressive, analysts and investors were disappointed with its outlook for Q1 of this year.

Apple is projecting revenue of about $6.8 billion for the current quarter with net income per share expected to be about 94 cents. Analysts were expecting the company to post March quarter revenue of $6.98 billion and $1.09 per share in net earnings.

iPod market saturation?
The shortfall between the company's projection and analysts' forecast led to concerns the company may be hitting market saturation with its iPod sale, a charge Apple rejected.

"We gave you guidance that we feel comfortable with," said Peter Oppenheimer, chief financial officer at Apple during a conference call to discuss the company's results.

Oppenheimer declined to comment on whether the weakening U.S. economy would negatively impact the company, saying that the management "would leave the economic forecasting to others. We will focus on managing our business."

Apple's stock price tumbled $18.64, or 12 percents, in after hour trading to $137. The shares had closed down 3.5 percent in regular trading on Tuesday, Jan. 22.

- Bolaji Ojo
EE Times

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