Apple Feels Tug Of Gravity: Shares Fall On Outlook, Uncertainty Over Watch Sales
CUPERTINO (KCBS) -- Apple was getting bruised Wednesday despite its earnings report showing soaring profits as investors appear spooked by its lukewarm outlook and uncertainty over sales of its smartwatch.
The company topped earnings estimates Tuesday, with profits up 38 percent to $10.7 billion and revenue up a third to nearly $50 billion.
However, Apple (AAPL) didn't sell quite as many iPhones as expected, and it disappointed analysts by not providing specific Apple Watch sales figures, rather lumping them in with the "Other Products" category which includes iPods and Apple TV.
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CEO Tim Cook says the purpose of that is to keep sensitive information on Apple Watch away from competitors.
But analysts noted that Apple reported $2.6 billion in revenue from its "Other Products" segment, which includes the watch among other things. That's about $952 million more than the previous quarter, when the watch had not yet gone on sale, or significantly less than the $1.8 billion in watch sales that analysts surveyed by FactSet were expecting.
Apple also reported iPad sales continue to slide, while Mac sales were up and iPhone sales in China nearly doubled.
Apple's stock was impacted by China's recent stock slide, given its rapid growth in China, where demand has been high for the larger-screen iPhone 6 and 6-Plus.
Apple's shares were also getting stung Wednesday by weaker-than-expected guidance for the current quarter. The company said Tuesday that it's expecting between $49 billion and $51 billion in revenue for the quarter ending in September. The mid-point of that range is below the average analyst estimate of $50.8 billion.
Shares were down around six percent in afternoon trading.
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