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Apple Slashes Holiday Earnings Estimates

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October 26, 2012 | Comments (3)

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Apple (Nasdaq: AAPL  ) has reduced its guidance for its upcoming 1Q 2013, the company revealed in its press release announcing 4Q 2012 results. The iPhone and iPad purveyor now expects a significantly lower net profit figure of $11.75 in the upcoming quarter. This is $3.74, or 32%, lower than average analyst expectations of $15.49. It also falls short of the $13.87 that the company earned in its 1Q 2012.

Revenue is now anticipated to come in at $52 billion, a 6% drop from analyst predictions of $55 billion. Apple expects its gross margin will be 36%, the lowest figure in several years. Gross margin for 4Q 2012 was 40%.

The upcoming quarter is particularly crucial for a consumer electronics firm like Apple, as it comes during the sales-happy holiday season.

Apple CFO Peter Oppenheimer said the expected shortfall is due to higher costs related to the company's proliferation of new products, including the just-introduced iPad Mini. CEO Tim Cook said Apple was "unwilling to cut corners" in the production of such goods for the sake of short-term gain.

The cut in guidance will undoubtedly have a big impact on the performance of Apple's stock. By picking up a copy of our premium research report on Apple, you'll get an in-depth analysis on the company and receive ongoing guidance as key news hits -- as it always does with this firm. Claim your copy today by clicking here now.

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Eric Volkman has no positions in Apple. The Motley Fool owns shares of Apple. Motley Fool newsletter services recommend Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 26, 2012, at 9:57 PM, someoneincensed wrote:

    Eric, earlier comments on this article pointed out that your entire premise for this article is false, that Apple never provided guidance for 1Q 2013 prior to yesterday, Oct 25 2012. Because Apple has never before posted guidance, this article's title, "Apple Slashes Holiday Earnings Estimate" is not just wrong, but harmfully misleading.

    When you eventually acknowledged the error, you insisted that "the rest of the numbers" were correct, didn't issue a retraction or update the article's title. Now, I see those earlier comments are missing.

    Motley Fool was once a decent read. This shoddy attention to detail is quite disappointing.

  • Report this Comment On October 26, 2012, at 10:40 PM, lrd555 wrote:

    99% of big companies don't make $52 Billion in year;

    is Google paying you guys to run this slanted articles?

  • Report this Comment On October 27, 2012, at 11:01 PM, Mccldwll wrote:

    As dozens of others have already pointed out in their comments, your article is beyond intellectually dishonest.

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