Apple Stocks Plummet After Reporting Flat Earnings

By Alphonsus E.WApple logo

After tech giants Apple Shares in fell close to 9% in after-hours trading the firm reported flat profits of $13.1bn (£7.9bn) during the October to January quarter. While the earnings exceeded expectations, the firm lowered it sales outlook for 2014, worrying investors. Apple said it sold a record 51 million iPhones and 26 million iPads..

Apple said it expected revenue of between $42bn and $44bn for 2014, slightly less than had been forecast. The firm said revenue rose by 29% in the greater China region, which includes China, Taiwan, and Hong Kong, compared to the same period last year. Apple announced a deal with the world’s biggest mobile phone network, China Mobile, in December, and many investors had been closely watching the earnings for hints on the company’s performance in the region. Apple’s phones have been available on China Mobile since 17 January.

“Last week was the best week for activations we’ve ever had in China,” said Mr Cook, while noting that iPhones are only available on China Mobile in 16 cities at the moment.

By the end of the year, Apple hopes to expand its offerings to more than 300 cities. However, Apple said sales in the rest of the Asia-Pacific region fell 9%, and that profits were hurt by currency fluctuations, particularly with the Japanese yen.

Apple also reported a sales dip in the Americas as well. This was partially due to stronger than expected sales of the more expensive iPhone 5S. Apple executives said on the call that it took the firm some time to change its supply chain to provide the US market with more of those phones compared with the cheaper iPhone 5C, primarily aimed at Chinese consumers.