Apple has best June ever; but Market is Disappointed

“We’re proud to report the best June quarter for both revenue and earnings in Apple’s history,” Apple Chief Executive Steve Jobs said in a statement accompanying the company’s quarterly results.  But that wasn’t enough to keep analysts from being disappointed in the company’s fourth quarter profit forecast . . . and Apple stock fell 11 percent ($17.47) to $148.82 in late hours trading.  The company’s share price has now dropped 16 percent for the year.

Why the disappointment, especially coming on the heels of the huge iPhone 3G introduction? Indeed, as Jobs said, Apple had a good third quarter:  Net income jumped 31 percent to $1.07 billion, or $1.19 per share — compared to $818 million and 92 cents this time last year.  But the market had already factored for those numbers.  What made the market jumpy was Apple’s forecast for NEXT quarter.  Analysts had predicted Apple’s fourth quarter earnings at $1.24 per share on $8.3 billion in sales.  Instead, the company forecast was $1.00, down a penny from the same quarter last year.  And sales were predicted to be just $7.8 billion — despite the fact that much of the new iPhone’s revenues won’t show on the books until that quarter.

Indeed, more than just the weak forecast — which suggested that Apple’s streak might be ending in the face of a weak economy — had analysts worried.  Another was the company’s falling gross margins — 34.2 percent this quarter, 31.4 percent predicted for the fourth quarter — suggesting that schools may be less interested in buying new equipment this autumn.  But the biggest factor of all in the falling stock price may have been Apple’s refusal, in the face of growing rumors, to make any comment about Jobs’ health other than that “Steve’s health is a private matter” . . .when, in fact, as the chairman of a public Fortune 500 corporation, it is anything but.  More