Apple Stocks Decline During After-Hours Trading

Apple Stocks Decline During After-Hours Trading

Apple stocks declined by over 5 percent after sales of the iPhone did not meet expectations of analysts.

Sales of the iPhone in first quarter of the 2014 fiscal year reached 51 million units, which was lower than the 55 million-unit estimate of analysts. Despite this, sales were higher than the 47.8 million unit sales during the last holiday season.

Guidance was offered by Apple for the second quarter that ends in March 2014. However, this was lower than expectations of a number of analysts, which may affect Apple stocks.

Apple Chief Financial Officer Peter Oppenheimer said the underlying performance of the business of the company is stronger than indicated by the guidance from Apple.

Inventory management of the company and issues in meeting manufacturing demand were some of the reasons for the lower guidance offered by the company, Oppenheimer added. Sales of the iPod went down by 52 percent during the December quarter. Sales of the device are expected to decline further.

Although revenues of Apple reach record levels with the release of updated devices, profits remained the same. The reported earnings of Apple increased from $54.5 billion to $57.6 billion, which was higher than the $57.46 billion estimate by analysts.

Earnings per share of Apple increased from $13.81 for every diluted share to $14.50 for every diluted share. Analysts expected earnings to reach $14.09 per share.

The sub-par performance of the iPhone was surprising since it was the first time the iPhone 5s and iPhone 5c became available for the entire quarter. However, reports have indicated that consumers were not akin to the iPhone 5c. Questions were also raised on the capability of Apple in meeting the demand for the iPhone 5s.

Moor Insights & Strategy principal analyst Patrick Moorhead said even as earnings are flat, many companies would focus more on their fundamentals. The company offers high-quality products that customer love and the 51 million-unit sale is a notable figure in itself.

Sales of the iPad increased from 22.6 million units to 26 million units for the first quarter, which is higher than the estimated sales of 24.6 million units by analysts. Mac sales also reached 4.8 million units, which was higher than the 4.1 million units in the same period a year ago.

Initially Apple stocks closed higher by 0.8 percent or $4.43 at $550.50 as trading ended in anticipation of the earnings released after the end of trading. However, after-hours trading resulted to a decline in Apple stocks by 5.6 percent or $30.53 at $519.97.

Posted by James Fried on Wednesday January 29 2014, 2:35 AM EST. Ref: LA Times. Link. All trademarks acknowledged. Filed under Featured News, Finance. Comments and Trackbacks closed. Follow responses: RSS 2.0