Why Apple Is Down $40 After Hours

Apple's  (NASDAQ: AAPL  ) latest earnings release has now hit the wire, and investors aren't happy. Shares fell more than $40 in after hours trading as iPhone unit sales came in shy of expectations. Apple sold 51 million iPhones during the holiday quarter, while investors were hoping for at least 55 million. On the bright side, iPad units came in fairly strong at 26 million.

On top of that, guidance for the current quarter calls for revenue in the range of $42 billion to $44 billion, also shy of market expectations. Total revenue came in at $57.6 billion, with earnings per share of $14.50. Both the top and bottom figures were able to beat estimates, but that wasn't enough to overcome the shortfall in iPhone unit sales. iPhone average selling prices put up a nice gain sequentially, which lends to the hypothesis that the iPhone 5c is pushing demand toward the iPhone 5s. Even if the product mix is shifting favorably, overall unit sales are still short of what investors were expecting.

In the following video, Evan Niu discusses Apple's latest earnings with Fool contributor Ashraf Eassa.

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  • Report this Comment On January 27, 2014, at 10:34 PM, twolf2919 wrote:

    There was no iPhone unit shortfall. Apple simply didn't sell as many units as "analysts" were guessing Apples should be selling. And, their guesses of course, were a moving target - with many analysts still fudging their guesses well after the quarter ended...which meant, of course, Apple had pretty much zero chance in hitting them.

    It's a bizarro world when a company meets or exceeds every metric they projected - but get punished for a couple of numbers they have absolutely no control over.

  • Report this Comment On January 27, 2014, at 11:05 PM, DanManners wrote:

    If you two had taken economics 101 you would have learned what a demand curve is. The point where you make the most money. Sales vs Sell price.

    Also Cook said Carriers change in the time you were allowed to upgrade and some other problems due to the mix.

    So Apple had higher ASP for the iPhones and made a big beat. The stock tanks. So what you are saying is that Apple can't win. A total joke.

  • Report this Comment On January 27, 2014, at 11:05 PM, dwilh51183 wrote:

    YEAH, I WAS READING THE ARTICLE THAT SAID AAPL IPHONE SALES WERE LIGHT. CAN YOU ANSWER ME THIS QUESTION...WHAT OTHER COMPANY IN THE WORLD IS HELD TO THE SAME INSANE HIGH STANDARDS THAT AAPL IS ? GOING FROM 33 MILLION IPHONE'S SOLD LAST QUARTER TO 51 MILLION SOLD THIS QUARTER IS A 55% INCREASE. WHAT OTHER COMPANIES ARE REQUIRED TO INCREASE SALES BY THAT HIGH A FIGURE? WHEN SAMSUNG REPORTED LAST QUARTER , THEY SOLD 91 MILLION , APPROXIMATELY ...SO THEREFORE WE SHOULD EXPECT SAMSUNG THIS QUARTER TO SELL ABOUT 160 MILLION PHONES IN 3 MONTHS. ARE YOU SERIOUS? AAPL HAD ANOTHER OUTSTANDING QUARTER BANKING 14 BILLION IN CASH, A FIGURE UNHEARD OF 10 YEARS AGO. I GUESS IF GOOG HAD 1.5 BILLION IN ADVERTISING SALES LAST QUARTER, WE SHOULD EXPECT THAT THEY WILL HAVE TO HAVE 2.6 BILLION BASED ON AAPL STANDARDS OR GOOG STOCK WILL DROP $200 A SHARE .AND CHIPOTLE NEEDS TO SELL 1.4 BILLION IN BURRITOS AND SALSA COMPARED TO 775 MILLION LAST QUARTER , TO BE JUDGED THE SAME WAY AAPL IS . SOMETHING VERY ILLEGAL AND CROOKED IS GOING ON WITH THE MANIPULATION OF AAPL STOCK . AAPL SHOULD BE TRADING AT 1575.00 A SHARE. THEY INCREASE THEIR EARNINGS AND CASH EVERY QUARTER FOR 7 STRAIGHT YEARS, BUT IT'S NEVER GOOD ENOUGH. I GUESS WE SHOULD EXPECT BOEING TO SELL 500 BILLION IN 777'S THIS QUARTER IF THEY SOLD 300 BILLION IN 777'S LAST QUARTER.

    AAPL SOLD MORE IMACS, AND MORE IPADS , LESS IPODS , BUT WE KNEW THAT IS A DYING PRODUCT. RANDY WILHELM

  • Report this Comment On January 27, 2014, at 11:06 PM, DanManners wrote:

    These two here are the reason for all of Apple's troubles.

  • Report this Comment On January 27, 2014, at 11:11 PM, dwilh51183 wrote:

    AGAIN, I THINK AAPL THEMSELVES HAD INTENTIONALLY SAID NEXT QUARTER'S SALES WILL BE WEAK! INTENTIONALLY? REALLY WHY WOULD AAPL DO THAT AFTER ANOTHER GREAT QUARTER,.... BY ANY OTHER COMPANIES STANDARDS? SO PEOPLE WOULD PANIC AND SELL THEIR AAPL SHARES (WHICH ARE SO UNBELIEVABLY UNDERVALUED!), AND THEN AAPL CAN BUY BACK SHARES AT MUCH LOWER PRICES AND BUY MORE SHARES BACK . NO OTHER COMPANY IN THE WORLD IS TREATED WITH THESE RIDICULOUS EXPECTATIONS! GREAT QUARTER AAPL .NOW PUT OUT SOME NEW PRODUCTS OR BUY NETFLIX OR DO SOMETHING GOOD

  • Report this Comment On January 27, 2014, at 11:13 PM, dwilh51183 wrote:

    VOTE FOR CARL ICAHN'S PROPOSAL.AAPL SHOULD HAVE BOUGHT BACK 20 BILLION IN THEIR OWN STOCK TONIGHT TO FORCE THEIR STOCK HIGHER,WHERE IT BELONGS. BUT COOK LET IT GET SLAUGHTERED

  • Report this Comment On January 28, 2014, at 1:19 AM, Scunnerous wrote:

    This sell-off has nothing to do with anything rational. It's happened every year after the holiday season for years, even decades and is part of the annual cycle. It's just the pigs at the swill who have decided that now is the time to take a bit of profit after the natural holiday quarter hump.

  • Report this Comment On January 28, 2014, at 8:06 AM, jdmeck wrote:

    There is no good reason.

  • Report this Comment On January 28, 2014, at 8:09 AM, jdmeck wrote:

    ANALysts. Enough said.

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