Despite Strong Sales, Apple Profit Declines

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Apple has released its second quarter financial report, and as many analysts anticipated, the company’s profits fell. However, Apple reported strong sales of iPhones and iPads, and CEO Tim Cook said they working on new products for the fall and 2014.

Macworld’s Lex Friedman reported, “As some investors feared, Apple on Tuesday reported numbers that were worse than its performance a year ago for the second quarter—though the company still saw record sales for its March quarter. The company posted $43.6 billion in revenue for the quarter, with net profit of $9.5 billion. That puts earnings at $10.09 per diluted share, down from $12.30 a year ago. In the same quarter last year, Apple reported $39.2 billion in revenue and profit of $11.6 billion.”

The Wall Street Journal’s Nathalie Tadena noted, “Apple Inc.’s (AAPL) fiscal second-quarter earnings slipped 18%, its first year-over-year quarterly earnings decline in a decade, as the consumer electronics company recorded weaker margins…. Gross margin narrowed to 37.7% from 47.4%. The company earlier this year projected margins between 37.5% to 38.5% for the second quarter.”

Computerworld’s Agam Shah added, “IPhone sales grew, totaling 37.4 million units, compared to 35.1 million in last year’s second quarter; however, in that period last year unit shipments increased by 88 percent year over year. Mac sales were flat, totaling just under 4 million units during the quarter. The company recorded fast growth with iPads, with shipments totaling 19.5 million during the quarter, compared to 11.8 million in the previous year’s quarter.”

Bloomberg’s Adam Satariano and Peter Burrows observed, “Apple Inc. (AAPL) declined as the iPhone maker reported its first profit drop in a decade and Chief Executive Officer Tim Cook dashed expectations that a new handset might arrive as early as June. The shares of Cupertino, California-based Apple declined as much as 3.4 percent. While Cook outlined plans to debut new products starting late this year, analysts including Gene Munster at Piper Jaffray Cos. had expected the iPhone 5S in June and now anticipate that the new handset may not ship until September at the earliest.”