July 22 2008
Strong Macintosh sales continued to drive profits at Apple as the computer maker reported its third-quarter results yesterday, but a tepid forecast sent shares in the computer maker lower.
While Apple executives hailed the strong quarterly results, Wall Street analysts quizzed the group about its unusually weak guidance.
The shares fell 10 per cent to $149.70 after it said it expected profit margins to slip, due in part to a forthcoming "product transition" that it declined to discuss.
Peter Oppenheimer, chief financial officer, hinted that aggressive pricing of new products could eat into profits.
"We are going to be delivering state-of-the-art new products [at price points] that our competitors aren't going to match," he said.
Apple brushed off concerns raised in recent weeks about the health of Steve Jobs, whose gaunt appearance at the company's annual software developer conference last month alarmed some observers.
Apple later said the Apple chief executive had been suffering from a "common bug".
When asked about Mr Jobs' health yesterday, Mr Oppenheimer said the Apple co-founder, who has previously battled cancer, had no plans to leave the company and his health was a "private matter".
Apple said it had made a net profit of $1.1bn in the third quarter, up from $818m in the year-ago quarter. Sales were $7.46bn, up from $5.41bn last time.
Revenues from Mac sales rose 61 per cent in the quarter as the company shipped almost 2.5m computers.
IPod music player shipments jumped 12 per cent while shipments of the iPhone nearly trebled, with 717,000 mobile handsets sold in the period compared with 270,000 last time.
That figure did not include Apple's new 3G iPhone, which went on sale in 21 countries around the world earlier this month.
Apple predicted earnings of $1 per share on sales of $7.8bn in the coming quarter - lower than most Wall Street analysts had expected.
The group expected its gross margin to fall to 31.5 per cent in the fourth quarter, from 34.8 per cent in the third quarter. It expected a 2009 gross margin of 30 per cent.
While it did not report any numbers, Apple said the reaction to its faster iPhone had been "overwhelmingly positive". It said iPhone customers had downloaded more than 25m software applications from the group's applications store.
Apple last week reported that it had sold more than 1m 3G iPhones during the handset's opening weekend.
