Apple (Nasdaq: AAPL) reported Wednesday first-quarter sales below analysts’ predictions, adding fuel to investor pessimism that has sent shares down 27 percent since September.
Profit was little changed at $13.1 billion, or $13.81 a share, in the period that ended Dec. 29, Cupertino, California- based Apple said today in a statement. Sales rose 18 percent to $54.5 billion. Analysts had predicted profit of $13.53 a share on revenue of $54.9 billion, the average of estimates compiled by Bloomberg.
The results bolster speculation that Apple’s growth may be ebbing amid higher production costs, stiffer competition from rivals such as Samsung Electronics Co. and slowing expansion in the global smartphone market. Investors are looking to Chief Executive Officer Tim Cook to demonstrate Apple has more blockbuster products in the pipeline to reignite sales.
“It’s going to call into question whether we have seen the peak of Apple,” said Shaw Wu, an analyst with Sterne Agee & Leach Inc. “One quarter can’t answer that question, but the concern will be heard louder until proven otherwise, and that will weigh on the stock.”
The lack of profit growth reflects higher manufacturing costs due to a product lineup overhaul ahead of the holiday shopping season. The first quarter is usually Apple’s most lucrative, and the company introduced the iPhone 5, iPad mini and restyled Mac to draw customers.
Sales of the iPhone, Apple’s biggest source of revenue and profit, reached 47.8 million units, matching the prediction by analysts surveyed by Bloomberg. The company also sold 22.9 million iPads, above the projected 22.4 million units.
Apple, the world’s most valuable company, fell in extended trading. The shares advanced 1.8 percent to $514.01 at the close in New York.
For the fiscal second quarter, which is now under way, Apple forecast sales of $41 billion to $43 billion. That compares with predictions by analysts for revenue of $45.5 billion. The company didn’t provide a profit forecast.
With the cost of redesigning its products, Apple’s gross margins, the percentage of sales remaining after deducting costs of production, was 38.6 percent in the first quarter, above the 36 percent the company had predicted in October.
Apple also sold 4.1 million Macs and 12.7 million iPods. Analysts had predicted the sale of 5.1 million Macs and 11.4 million iPods.
Today’s results compare with the 2011 holiday quarter, which was a week longer than the 13-week period just reported.
Initial iPhone 5 sales were lower than some investors anticipated due to supply shortages, and consumers criticized new mapping software. That contributed to the stock slide since an intraday high on Sept. 21, said Brian White, an analyst at Topeka Capital Markets Inc. The company overhauled its management structure to fire longtime mobile-software head Scott Forstall, and reports that Apple has been cutting orders of components also led some to believe demand is falling, White said.
“It has been an avalanche of bad news and at some point it just has to stop,” White said.