The Norman Transcript

October 26, 2012

Apple profit misses estimates on disappointing iPad tablet sales

By Adam Satariano

SAN FRANCISCO — Apple Inc. on Thursday reported profit that missed analysts' predictions as customers held off on iPad purchases before the release of a new model.

Profit rose to $8.22 billion, or $8.67 a share, in the fiscal fourth quarter, Cupertino, Calif.-based Apple said in a statement. That compares with $8.3 billion, or $8.75 a share, the average of analysts' estimates compiled by Bloomberg. The company's sales and profit forecasts for the current quarter also fell short of predictions.

Apple sold 14 million iPads, fewer than the 15.3 million predicted by analysts in a Bloomberg survey, as customers delayed buying old versions before the release of the iPad mini in the current quarter.

Apple's stock was halted before the results were released. It had slipped 1.2 percent to $609.54 at the close in New York, and has shed 13 percent since reaching a record the week iPhone 5 went on sale, related partly to the company's struggle to keep up with demand for the smartphone.

 First-quarter earnings will be about $11.75 a share on sales of about $52 billion, Apple said. That compares with analysts' estimates of $15.49 a share on sales of $55.1 billion.

Besides contending with iPhone part shortages, Apple is also grappling with increased competition in mobile-device markets it pioneered. It's vying with Samsung Electronics Co. for leadership in global smartphones, and is squaring off with Amazon.com, Google and Microsoft, which have introduced iPad alternatives.

Besides a new iPad, the company in recent weeks introduced a new iteration of its iPhone, upgrades to the existing iPad and new versions of is iPod and Mac computer line.

Apple sold 26.9 million iPhones during the period, more than the 26.3 million predicted by analysts in a Bloomberg survey. Analysts had lowered iPad predictions earlier this week after Cook, during the unveiling of the new iPad, said the company had sold 100 million iPads to date - an indication that some quarterly projections were too high.