Shares of Apple Inc. fell sharply in after-hours trading Tuesday as traders reacted negatively to Apple's guidance for the March quarter and iPhone sales that were less than expected. Shares of $AAPL dipped to US$507.00, down $43.50 (-7.90 percent), in the wake of Apple's earnings report in the after-hours session.
Apple reported record revenue for the December quarter—the company's first fiscal quarter—of US$57.6 billion, up from $54.5 billion in the year ago quarter. Profits were $13.1 billion, flat year over year, but because Apple has has bought back millions of shares, earnings per share came in at $14.50, up from $13.81 EPS a year ago. Apple beat consensus EPS estimates of $14.09, but it wasn't enough for the after-hours market, which sent shares of $AAPL down $31.26 (-5.68 percent) to $519.24 per share, in part because of Apple's Q2 guidance.
With Apple's first fiscal quarter earnings report scheduled for this afternoon, Well Fargo analyst Maynard Um is offering up his last minute expectations. He's expecting Apple will report earnings driven by iPhone 5S and iPad sales: Specifically, 54.8 million iPhones and 24 million iPads.
Apple's first fiscal quarter earnings report conference call is scheduled to start Monday afternoon at 5PM eastern time. With the iPhone 5S and iPhone 5C, plus iPad Air and iPad mini sales during the holiday quarter, Apple could announce record breaking earnings and revenue numbers. Be sure to check in with The Mac Observer this afternoon for our earnings report coverage.
Carl Icahn stepped up his pressure on Apple to increase its stock buyback program with a rambling open letter to shareholders. In that letter, which weighs in at a hefty 2,982 words, two themes are clear: the first is that Apple should listen to him because he knows best, and the second is that he just plunked down another billion dollars to buy more $AAPL stock.
What do you do when you don't have confidence in a company's ability to manage its cash? Buy up the company's stock while at the same time berating it. That's what Carl Icahn is doing with Apple as his brings his stock investment in the iPhone and iPad maker up over US$3 billion.
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Mr. Icahn really wants Apple to increase its stock buyback program. A lot. He already has a $3 billion investment in the company, is still buying more stock, and is now saying the board of directors is doing a disservice to shareholders. Apple's February 28 shareholders meeting could get pretty interesting.
Goldman Sachs analyst Bill Shope thinks Apple will report very strong iPhone and iPad sales figures during its first fiscal quarter earnings report, and because of that he is raising his 12-month target price for the company's stock from US$620 up to $635.
Apple's 2014 first fiscal quarter combined iPhone and iPad sales figures will top 78 million units, according to Canaccord Genuity analyst Michael Walkley. Those numbers will be driven by the iPhone 5S and iPad Air, both introduced later in 2013.
Apple will host its annual stockholder meeting on Friday, February 28. The iPhone and iPad maker uses the annual meeting for stockholder votes on company issues, and to field questions from investors.
Apple will hold its Q1 2014 earnings call on Monday, January 27th at 5:00 PM EST. Apple's guidance for the quarter offered during the Q4 2013 report has many expecting record-setting numbers, with revenue estimates of $55 to $58 billion and gross margins of between 36.5 and 37.5 percent.
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