SAN FRANCISCO - Apple’s latest quarterly earnings fell 9 percent as more people bought the company’s lower-priced iPhones and iPads.
The company’s fourth quarter results announced Monday included early sales of the latest iPhones released late last month.
The models, called the 5s and 5c, helped Apple Inc. increase its iPhone sales from the same time last year. But the average price that Apple fetched for its iPhones declined, extending a recent trend that has trimmed the Cupertino, Calif., company’s profit margin and depressed its stock price.
This marks the third consecutive quarter that Apple’s earnings have dropped from the previous year.
Apple earned $7.5 billion, or $8.26 per share, during the three months ending Sept. 28. That compared with income of $8.2 billion, or $8.67 per share, last year.
The latest quarterly earnings topped the average estimate of $7.92 per share among analysts polled by FactSet.
Revenue rose 4 percent to $37.5 billion - about $600 million above analyst predictions.
Investors were hoping for a better showing and, perhaps, a more optimistic forecast for the current quarter, which covers the crucial Christmas shopping season. Apple forecast revenue ranging from $55 billion to $58 billion in the quarter ending in late December. Analysts had projected revenue of $55.6 billion.
The company, which is grappling with lower-priced products from Samsung Electronics Co. and others, is under pressure to reignite growth and maintain its margins with a new blockbuster product. Apple’s earnings jumped 61 percent in its previous fiscal year that ended September 2012, then fell this year for the first time in at least a decade.
“People aren’t going to be excited until they see a definitive return to growth,” said Daniel Ernst, an analyst at Hudson Square Research in New York.
Apple’s stock is down about 25 percent from its peak reached 13 months ago, reflecting Wall Street’s worries about the earnings slump amid fiercer competition in the smartphone and tablet computer market. Investors are also concerned that the company hasn’t introduced a breakthrough product since the death of Apple’s co-founder and chief visionary, Steve Jobs, two years ago.
Apple Inc. shares rose $3.92 to close Monday at $529.88 before the quarterly earnings report was released.
The company sold 33.8 million iPhones in the past quarter, a 26 percent increase from the same time last year. But the prices for those iPhones averaged $577, a 7 percent decrease from an average price of $618 a year ago.
“This is a company that has routinely blown the doors off their estimates, so meeting or just exceeding is probably a disappointment,” said Jack Ablin, chief investment officer at BMO Private Bank, which has $66 billion under management and owns Apple shares.
Apple has been busy updating its product lineup ahead of the Christmas season. The company has said its new iPhones will be available in about 100 countries by the end of the year.
The higher-end iPhone 5s costs $199 with a two year wireless contract and includes a more powerful processor, improved camera and fingerprint-reading technology.
The new iPhone 5c is mainly last year’s model with colorful plastic cases. The handset is seen as Apple’s bid to win more customers in emerging markets like China and Russia. Without a contract, the handset costs about $800, leading analysts to say it’s too expensive for those markets and that demand is light.
A new iPad Air also goes on sale Friday, followed later in the month by an updated iPad mini with a high-definition screen.
Information for this article was contributed by Adam Satariano, Ian King and Peter Burrows of Bloomberg News and by staff members of The Associated Press.
Business, Pages 23 on 10/29/2013