US$66 million net profit
beat the average of analysts’ earnings targets, the company has issued a first-quarter profit and sales warning.
Apple had been expected to report earnings of 18 cents a share and sales of $1.604 billion in its fiscal-first quarter ending December, according to Thomson Financial/First Call. However, in a press conference, Apple Chief Financial Officer Fred Anderson said that, given the uncertain global political environment and weak economy, Apple is targeting December quarter revenues of at least $1.4 billion and earnings per share of at least 10 cents.
Normally, sales in the December quarter are significantly higher than previous quarter. Several analysts had been forecasting a roughly 10 percent sequential increase in revenue for Apple, but that no longer looks likely.
Why? Gross profit margins are expected to decline due to a shift to consumer systems (with lower profit margins) during the holiday season and reduced laptop costs. Also, operating expenses will increase next quarter due to holiday advertising and promotions. Finally, consumer spending is a necessity for a good December quarter and he’s “not confident about consumer spending” for the time period, Anderson said.
“Consumer confidence has to be there for spending to reach the level it was at before Sept. 11,” he added.
Apple shares fell $1.02, or 6 percent, to $16.99, after today’s financial announcements.