Apple stock sinks on outlook, firm outlines iPhone sales
July 21 2008 - 6:27 pm ET | Phil Carson | RCR Wireless News
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Apple Inc.’s stock sank more than 10% in after hours trading today after the company forecast fiscal fourth-quarter earnings below analysts’ expectations.
The company sold 717,000 iPhones in the fiscal third quarter that ended June 28, but no clear, year-ago quarterly comparisons were possible. The company sold 270,000 units on June 29-30, 2007, the last two days of the year-ago quarter when the original iPhone was launched, which reflected two days of pent-up demand.
Nor was a clear sequential comparison possible. The company sold 1.7 million iPhones in the fiscal second quarter of this year, but pulled the product from retail shelves well before the end of the quarter to make way for the iPhone 3G model, which has been on sale since July 11, 13 days into the company’s current, fiscal fourth quarter.
The fiscal third-quarter number of units sold was less than half the preceding quarter’s sales, which might also reflect consumers’ decision to hold off purchasing an iPhone until the iPhone 3G model went on sale.
Apple said it had revenue of $7.5 billion in the fiscal third quarter, up from $5.4 billion in the year-ago quarter. Net income was nearly $1.1 billion, up from $818 million in the year-ago quarter.
The company’s Macintosh computer business jumped 41% over the year-ago quarter, however, boosting its market share to 8.5%, and third place behind Dell Inc. and Hewlett Packard, according to Gartner.
The company also sold 11 million iPods during the quarter just ended, reflecting 12% growth in units and 7% growth in revenue over the year-ago quarter, which reflects slowing growth in that product line.
The iPhone sales in the fiscal third quarter brought in about $419 million in revenue, small potatoes compared with the $3.6 billion in revenue earned by its Macintosh lines (desktop and laptop) and $1.7 billion earned by the iPod lines. Other revenue is derived from iTunes ($820 million), peripherals and hardware ($437 million) and software ($500 million).
