Apple sets 4Q revenue, earnings records, but still falls short of forecasts

Apple (Nasdaq: AAPL) set record revenue and earnings marks for a fiscal fourth quarter but saw its shares get hammered in after hours trading when it missed analysts' predictions for profits for the first time in 26 quarters.

The company, reporting its first results since the death of co-founder Steve Jobs Oct. 5, said earnings were up 54 percent for the quarter, driven by sales of the iPad and iPhone.

"We are extremely pleased with our record September quarter revenue and earnings and with cash generation of $5.4 billion during the quarter," said Peter Oppenheimer, Apple's CFO. "Looking ahead to the first fiscal quarter of 2012, which will span 14 weeks rather than 13, we expect revenue of about $37 billion, and we expect diluted earnings per share of about $9.30."

Apple said it sold 17.1 million iPhones, 21 percent more than it had in the like quarter a year ago, but significantly below the 20 million analysts had projected. The company said that it sold 4 million iPhone 4S models in the first three days of its availability, a record for the company. It pointed out that many consumers had delayed purchasing an iPhone until the new version was released.

"We are thrilled with the very strong finish of an outstanding fiscal 2011, growing annual revenue to $108 billion and growing earnings to $26 billion," said Tim Cook, in his first earnings call as Apple's CEO. "Customer response to iPhone 4S has been fantastic; we have strong momentum going into the holiday season, and we remain really enthusiastic about our product pipeline."

But Apple also missed the mark on iPad sales with 11.1 million units sold in the quarter; analysts had projected 11.5 million. Still, it was close to three times as many iPads as it sold a year ago. The company sold 4.9 million Macintosh computers, up 26 percent from a year earlier, and bettering analyst expectations of 4.4 million sales.

As to profits, analysts predicted Apple would report earnings of $7.31-$7.39 per share. The company reported $6.62 billion in profits for the quarter, or $7.05 per share; a year ago profits were $4.31 billion, or $4.64 a share.

Revenue in the quarter that ended in September was $28.3 billion. Analysts had predicted sales of $29.6 billion.

Michael Obuchowski, chief investment officer at First Empire Asset Management, told Bloomberg that analysts may be getting used to overestimating Apple's abilities to perform.

"That the company can maintain the growth rate that some of the analysts envision is not very realistic," he said. "There will be a reevaluation of the analysts' expectations."

For more:
- see this Bloomberg article
- see this release

Related articles:
Apple posts record revenues, sees profits jump 82% in Q3
Apple eyes $100 billion business opportunity: Connected TV, home automation
Something's brewing at Apple, could it be feature films on iCloud?
Apple introduces revamped Apple TV device
Apple strikes it rich in Q2; will this be the year of Apple TV?