Apple reports higher earnings, stock drops 5% after hours

Apple reports higher earnings, stock drops 5% after hours
Apple reported that its earnings rose 54% in its fourth quarter on the back of strong sales of the Apple iPhone 4 and Apple iPad 2. Still, the $7.05 a share earnings report came in below expectations sending the stock 5% lower after hours. Analysts expected profits of as much as $9.01 a share for the period. Gross margin was wider at 40.3% from 36.9%.

Apple sold 17.1 million units of the Apple iPhone last quarter and 11.1 million Apple iPod copies. For the former, that was a 21% increase from the prior year and for the latter, sales nearly tripled year-over-year. Just last Friday, the company launched the Apple iPhone 4S and the latest iteration of Apple's touchscreen phone sold 4 million units over the opening 3 days. The latest iPhone won't have an impact on earnings until the first quarter 2012 report.

It is a strong start to Apple's flagship product which nonetheless has some tough competition including the Samsung Galaxy S II and the just announced Motorola DROID RAZR. Tonight, another competitor will be launched when Google and Samsung introduce the Google Nexus Prime (also known as the Google Galaxy Nexus), the first phone to run on the latest Android build, Ice Cream Sandwich.

source: Apple via WallStreetJournal


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