Apple shares plunge after reporting flat earnings
- 27 January 2014
- From the section Business
Shares in tech giant Apple fell close to 9% in after-hours trading after the firm reported flat profits of $13.1bn (£7.9bn) during the quarter ending 28 December.
While earnings beat expectations, sales guidance for the current quarter was lower than analysts expected.
Apple said it sold a record 51 million iPhones and 26 million iPads.
"We are really happy with our record iPhone and iPad sales," said Apple boss Tim Cook in a statement.
Apple said it expected revenue of between $42bn and $44bn for its second quarter of 2014, slightly less than analysts had forecast.
Crucially for analysts, the firm said revenue rose by 29% in the greater China region, which includes China, Taiwan, and Hong Kong, compared to the same period last year.
On a conference call to discuss the earnings, Mr Cook said: "We really turned in a stellar quarter in greater China."
Apple announced a deal with the world's biggest mobile phone network, China Mobile, in December, and many investors had been closely watching the earnings for hints on the company's performance in the region.
Apple's phones have been available on China Mobile since 17 January.
"Last week was the best week for activations we've ever had in China," said Mr Cook, while noting that iPhones are only available on China Mobile in 16 cities at the moment.
By the end of the year, Apple hopes to expand its offerings to more than 300 cities.
However, Apple said sales in the rest of the Asia-Pacific region fell 9%, and that profits were hurt by currency fluctuations, particularly with the Japanese yen.
Apple also reported a sales dip in the Americas as well.
This was partially due to stronger than expected sales of the more expensive iPhone 5S.
Apple executives said on the call that it took the firm some time to change its supply chain to provide the US market with more of those phones compared with the cheaper iPhone 5C, primarily aimed at Chinese consumers.
Apple also noted that some US carriers changed their upgrade policies, which hurt sales in the region, as consumers became more reluctant to upgrade aging iPhones.
Sales of iPods - Apple's once iconic music player - fell 52%.
"I think all of us have known for some time that iPod is a declining business," said Mr Cook.
Correction: This story was updated on 29 January 2014 to make it clear that Apple's most recent quarter finished on 28 December.