Apple's earnings soar, but disappoint; stock plunges after hours
Shannon Cross, managing director at Cross Research said, "There’s a lot of hype built up into Apple’s earnings. Everything must go down at some point, I suppose. Clearly, there was pressure on the iPhone gross margins and the iPad," The Cupertino based company reported average gross margins of 36.9%, down from the year earlier's 41.8% The company expects a further slide in margins to 36% in the current quarter.
Apple CEO Steve Jobs attended the conference call, a rarity. Jobs said he attended to honor the company's record earnings. Also on his agenda was a chat to knock iPhone rivals, including Android handsets. Sales of phones using Google's open source OS outnumbered the sales of the Apple iPhone in the calendar third quarter. Jobs used the opportunity to knock Android's fragmentation because of the large number of handsets using different versions of the Android OS. The CEO said, "With iPhone, every handset works the same. We think Android is very fragmented and more fragmented every day."
While Apple's stock is currently taking a beating after hours, it did set a new all-time high earlier Monday at $319 as traders scrambled to get in to the stock before the earnings report. Unfortunately for those late buyers, it looks like the old axiom, "Buy on the rumors, sell on the news" will turn out to be appropriate in this case.
1. PhoneUser (Posts: 78; Member since: 11 Dec 2008)
Why does phonearena (or any other article) ALWAYS say Apple, the Cupertino based company...... i think by now we ALL know where they are based out of so why keep calling them that? Maybe its just me but i dont introduce my friends as John, from Los angeles Ca.......
2. clevername (Posts: 1435; Member since: 11 Jul 2008)
That's the way that the wsj and nut and other publishers refer to a company when talking about them financially
3. rent (unregistered)
It's actually a (misleaded) journalism resource... As I guess the editors are not journalists they are using it wrong anyway... The idea is not to repeat the same name more than three times per paragraph, so they exchange apple by a synonym. It should be Apple, and then say the Cupertino based company, and then something like the fruit company, etc... But by saying apple, the cup... they are doing it wrong
4. mahsan88 (Posts: 7; Member since: 03 Mar 2010)
"With iPhone, every handset works the same. We think Android is very fragmented and more fragmented every day." Bull. iPhone 2G, Phone 3G, iPod (1st gen) and iPod (2nd gen) are unable to run iOS 3. Fragmentation exists in Apple as well. By numbers, I feel like there are more apple products that are running older versions of the OS. Difference between Google and Apple: Apple and Steve Jobs are too damn arrogant to admit that fragmentation exists with their products, because their products are sent from the heavens. At least Google acknowledges the fragmentation and realizes that something needs to be done, and actually ARE making an effort to fix the issue.