This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Apple Shares Go Sour

Updated from 5:05 p.m. EST

SAN FRANCISCO -- Apple (AAPL) blew past Wall Street's expectations for the first quarter, but sluggish sales in the company's iPod division prompted investors to keep the stock in a steep downtrend.

Shares of Apple plunged 11.1% in after-hours trading to $138.39 -- a four-month low. The stock has retreated more than 30% from its 52-week high last month.

Apple's Not Totally Baked

Apple posted a first-quarter profit of $1.58 billion, or $1.76 a share, compared with profit of $1 billion, or $1.14 a share, the year-before.

The company reported revenue of $9.6 billion, compared to revenue of $7.1 billion a year ago. Analysts polled by Thomson Financial were expecting earnings before items of $1.62 a share on revenue of $9.46 billion.

About 22 million iPods were sold in the quarter representing a 17% revenue growth. But Wall Street was expecting nearly 25 million devices to move, and unit growth was just 5%.

Music product services accounted for about 50% of total revenue during the quarter, said Apple.

"One of our primary goals for this holiday season was to establish an entirely new type of iPod in the marketplace, the iPod touch," Chief Financial Officer Peter Oppenheimer told analysts on a conference call. "This new iPod has the potential to grow the iPod from being just the music and video player into being the first mainstream Wi-fi mobile platform running all kinds of mobile applications."

The iPod touch helped increase the iPod's average selling price to $181, which drove revenue up 17% from a year ago, said Apple.

Apple shipped 2.31 million Macs, posting a 47% revenue growth from the year-before -- mostly in line with analysts' expectations. In terms of units sold, Macs grew 44% from a year ago.

"That's more than two-and-a-half times the overall market rate of growth for the December quarter based on the latest forecasts published by IDC," said Oppenheimer.

Quarterly iPhone sales came in at 2.31 million devices. That's likely to disappoint many analysts, who had been expecting iPhone sales to range from 2.2 million to 2.5 million units in the holiday season.

Total revenue recognized during the quarter from sales of iPhones, iPhone accessories and payments from carriers was $241 million. Total deferred revenue from iPhone and Apple TV was $1.44 billion at the end of the December quarter, compared to $636 million at the end of the September quarter.

Revenue from Apple retail stores grew 53% from a year ago to $1.7 billion.

The company plans to open about 35 to 40 stores in fiscal 2008. Some 25 of the company's 204 stores are currently outside the U.S. and this year Apple hopes to have more stores internationally, including its first few retail stores in China.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,265.99 +109.14 0.64%
S&P 500 2,011.36 +9.79 0.49%
NASDAQ 4,593.4250 +31.2360 0.68%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs