Apple on Tuesday reported a rise in its quarterly profit to $8.8 billion on hot iPad sales but the results came up short of lofty Wall Street expectations, prompting its shares to dive.
The profit in the fiscal quarter to June was up 20.5 percent from a year earlier and amounted to $9.32 dollars a share, well below the consensus forecast of $10.36 dollars.
Revenues rose 22.5 percent to $35 billion, also below expectations of more than $37 billion.
In a conference call with analysts, Apple chief financial officer Peter Oppenheimer said that revenue in the quarter was hampered by weak sales in Europe, a strengthened US dollar, and rumor of a new iPhone poised for release.
'Our weekly iPhone sales continue to be impacted by rumors and speculation about new products,' Oppenheimer said.
Apple factored a 'product transition' in September into financial guidance for the current quarter, fueling wild talk of a next-generation iPhone on the horizon.
'We try very hard to keep our product roadmap secret and confidential,' Apple chief Tim Cook said during the call.
'I'm not going to put any energy into stopping people from speculating,' he added. 'I'm glad that people want the next thing; I'm super happy about it.'
With Apple's rare miss of analyst forecasts, shares slid more than five percent in after-hours trade to $569.75.
Apple said it was pleased with the results, including sales of 17 million iPads, a year-over-year rise of 84 percent.
The company also sold 26 million iPhones in the quarter, up 28 percent, and four million Macs, a two percent unit increase despite overall computer industry sales inching down a percent in the quarter.
'We're thrilled with record sales of 17 million iPads in the June quarter,' Cook said.
'We've also just updated the entire MacBook line, will release (the computer operating system) Mountain Lion tomorrow and will be launching (mobile operating system) iOS 6 this fall.'
Cook added that the Cupertino, California-based company has 'amazing new products' on the way.
Oppenheimer said the company expects revenue of $34 billion and earnings per share of about $7.65, also below expectations.
Some analysts remained upbeat despite the earnings miss, saying that Apple could likely get a lift from an expected introduction of the iPhone 5, an updated model of the hot-selling smartphone, later this year.
Reports have said Apple could also release a smaller version of its iPad tablet, which dominates the market.
Peter Misek at Jefferies & Co. said the disappointing results came from a 'pre-iPhone 5 inventory adjustment' and reiterated his 'buy rating' with a target price of $800.
Misek said Apple's guidance was low because 'management is conservatively not including the iPhone 5 launch in our view... We believe investors have been waiting for this bad guidance to be on the tape before buying the stock ahead of the iPhone 5, iPad Mini, and iTV product launches.'
Barclays Capital analyst Ben Reitzes offered a similar view.
'We believe these results will disappoint investors near term but the iPhone 5 cycle is still ahead,' he said in a note to clients.
'We still believe that Apple is perhaps the most disruptive company in tech and is poised to gain more share in smartphones, tablets and PCs, but we will be watching the developing situation closely.'
Apple's share of the US smartphone market was expected to inch up one percentage point to 31 percent this year, while the share for handsets powered by Google-backed Android software was expected to hit 41 percent, according to eMarketer.
Apple used the earnings report to declare a cash dividend of $2.65 per share of common stock.
The report comes with Apple battling in the courts over patents, mainly with South Korean archrival Samsung.
A trial is set to begin Monday in the case in which Apple accused Samsung of infringing on copyrights by copying certain features of the iPad and iPhone to win market share for Samsung's devices powered by the Google-created Android operating system.
Apple is seeking $2.5 billion in the case in a federal court in California.
Apple and Samsung are fighting patent battles in more than half a dozen countries.
Each company accuses the other of infringing on patented technology in smartphones or tablets.
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