Apple reported its third-quarter earnings on Tuesday, below Wall Street analysts expectations.
Apple’s third-quarter earnings of $7.05 a share on revenue of $28.3 billion were below estimates of $7.22 a share on revenue of $29.5 billion. Apple’s earnings miss is a first for the company in nine years, according to The Wall Street Journal. iPhone sales for Q3 2011 racked up 17.07 million units compared to estimates of around 20 million. Despite the sales being below expectations, the figure is a 21% gain over the same quarter last year. Apple’s stock dropped 6% in after hours NASDAQ trading on Tuesday.
Apple’s earnings miss comes just two days before Microsoft is scheduled to report its fiscal first-quarter earnings for 2012. Microsoft’s Windows revenue is likely to wobble thanks to weak growth in the PC market and competition from Apple’s iPad and MacBook Air sales. Apple announced on Tuesday that it has sold 11.12 million iPads during the quarter, a 166% increase from a year ago. The company also shipped 4.89 million Macs during the quarter, another increase from the same period a year ago. Apple’s iPad device is believed to be a factor in the slow down of PC sales.
Worldwide PC shipments totaled 91.8 million units in the third quarter of 2011, a 3.2 percent increase from the third quarter of 2010, according to preliminary results by Gartner last week. IDC backed up Gartner’s findings by reporting a 3.6% growth in the third quarter of 2011 (3Q11) compared to the same quarter in 2010. Despite the slow down of PC sales, Microsoft could make up for this with success in other areas of the company. Microsoft’s Xbox and Kinect sales have been strong this year, dominating U.S. sales charts for the whole of 2011.
Intel announced its third-quarter results on Tuesday. ”Intel delivered record-setting results again in Q3, surpassing $14 billion in revenue for the first time, driven largely by double-digit unit growth in notebook PCs,” said Paul Otellini, Intel president and CEO. “We also saw continued strength in the data center fueled by the ongoing growth of mobile and cloud computing.” Intel’s third-quarter results saw the company set new records for microprocessor units shipped, EPS, earnings and revenue, which was up 28% year-over-year. Key Intel third-quarter facts:
- PC Client Group revenue of $9.4 billion, up 22 percent year-over-year.
- Data Center Group revenue of $2.5 billion, up 15 percent year-over-year.
- Other Intel® architecture group revenue up 68 percent year-over-year.
- Intel® Atom™ microprocessor and chipset revenue of $269 million, down 32 percent year-over-year.
- McAfee Inc. and Intel Mobile Communications contributed revenue of $1.1 billion.
- The platform average selling price (ASP) was up year-over-year and flat sequentially.
- Gross margin was 63.4 percent, 0.6 percent below the midpoint of the company’s expectation.
- R&D plus MG&A spending was $4.2 billion, slightly below the company’s expectation.
- Net gain of $107 million from equity investments and interest and other, consistent with the company’s expectations of approximately $100 million.
- The effective tax rate was 29 percent, above the company’s expectation of approximately 28 percent.
- The company used $4.0 billion to repurchase 186 million shares of common stock.