Apple profits fall despite strong iPhone sales

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Posted: Tuesday, October 29, 2013 12:00 am

SAN FRANCISCO — Unlike past years, Apple released two new iPhones in September instead of just one. The company’s financial earnings report Monday offered the first hints that the new strategy might result in stronger overall revenue. Apple reported revenue of $37.5 billion in the latest quarter, up from $36 billion in the same quarter a year ago.

Still, the two phones did not help lift the company’s profit. Apple earned $7.5 billion, or $8.26 a diluted share, in the latest quarter, down from $8.2 billion, or $8.67 a diluted share, during the same quarter last year.

The company said it sold 33.8 million iPhones, up from 26.9 million in the same quarter last year. Wall Street analysts had expected that Apple would sell 29 million to 38 million new iPhones.

The lower profit may be because of slightly lower sales of Macs. The company said it sold 4.6 million Macs, compared with 4.9 million in the same quarter last year. Apple’s iPad sales were roughly flat, at 14.1 million, but overall revenue for its iPads declined 13 percent.

The company beat the expectations of Wall Street analysts. They had expected earnings of $7.93 a share and revenue of $36.84 billion, according to a survey of analysts by Thomson Reuters.

“We’re pleased to report a strong finish to an amazing year with record fourth-quarter revenue, including sales of almost 34 million iPhones,” said Tim Cook, Apple’s chief executive.

However, Jack Ablin, chief investment officer at BMO Private Bank, which has $66 billion under management and owns Apple shares, said, “This is a company that has routinely blown the doors off their estimates so meeting or just exceeding is probably a disappointment.”

Apple has positioned itself aggressively for the coming holiday quarter, the most lucrative time of year for hardware makers. Following the release of the two iPhones in September, Apple is set to release two new iPads in November. It also released new Mac laptops last week.

This report includes material from Bloomberg News.

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