Apple Profit Rises 57 Percent; Shares Fall on Outlook

Apple Profit Rises 57 Percent; Shares Fall on Outlook

Jan. 22 (Bloomberg) -- Apple Inc. reported a 57 percent jump in first-quarter profit and gave a forecast that missed analysts' estimates, sending the shares down 8.8 percent.

Net income rose to $1.58 billion, or $1.76 a share, from $1 billion, or $1.14, a year earlier, Apple said today in a statement. Sales gained 35 percent to $9.61 billion. Analysts anticipated $1.60 a share in profit on revenue of $9.43 billion in the quarter ended Dec. 29.

Apple's sales and profit forecasts for this quarter heightened concern that a slowdown in the U.S. economy may curb spending on computers and consumer electronics such as the iPod and iPhone. Chief Executive Officer Steve Jobs introduced an ultra-thin notebook last week to bolster sales.

``Apple is disproportionately exposed to a potential slowdown,'' Toni Sacconaghi of Sanford C. Bernstein & Co. said in a Jan. 18 report. He is the top-ranked computer analyst by Institutional Investor Magazine. ``The upside from improved profitability may also be more limited this year.''

Profit this quarter will be 94 cents a share on sales of $6.8 billion, Cupertino, California-based Apple said. Analysts estimated $1.11 a share in profit, and revenue of $6.98 billion, according to a Bloomberg survey.

Apple fell $13.64 to $142 in extended trading. The stock dropped $5.72, or 3.5 percent, to $155.64 at 4 p.m. New York time in Nasdaq Stock Market trading. The shares have dropped 23 percent since reaching a record $202.96 in December.

Apple Forecast

Apple had beaten its forecast in every quarter for three years before today's report, and issued forecasts that missed analysts' estimates in seven of the eight previous periods.

``Apple shares have corrected along with the technology sector due to macroeconomic concerns,'' Shaw Wu, an analyst with American Technology Research in San Francisco, said in a report today.

Wu is among 24 analysts who recommend investors buy Apple's shares, according to Bloomberg data. Four rate the shares ``hold,'' and nobody recommends selling.

Jobs, 52, led a revival in Mac sales after incorporating faster chips from Intel Corp. in 2006. Mac shipments topped more than 1 million in each of the prior 12 quarters, reaching a record 2.16 million in the period ended in September.

Apple posted the biggest gain among U.S. personal-computer makers in the calendar fourth quarter, according to Gartner Inc., a research firm in Stamford, Connecticut. Shipments rose 28 percent, more than double the 9.6 percent increase for market leader Hewlett-Packard Co.

In September, Jobs introduced a new version of the Nano that can play video. He also added the iPod Touch, which uses the same widescreen display built into the iPhone.

Today's results include iPhone sales in Europe for the first time. Apple began selling the handset in the U.K., Germany and France in November, after it went on sale in the U.S. in June. The company said the iPhone will go on sale in Asia sometime this year.

BLOOMBERG