Apple earnings fall short, but still impress
SAN JOSE, Calif. (KGO) -- Ironically, the hype over the new iPhone may have hurt Apple's sales in the third quarter. Apple reported earnings Tuesday that fell below expectations.
Despite record-setting profit, investors and analysts expected more from one of Silicon Valley's superstars.
Apple executives kept talking about how excited they were that consumers snapped up a record-setting four million of the new iPhone 4S over the weekend. But that apparently hurt sales of the older iPhone 4 over the past three months as people waited for the new model.
Apple did sell 17.1 million iPhone 4s in the past quarter, up 21 percent from the 14 million sold at the same time last year, but that's five million fewer than expected.
Record sales for the Mac and iPad helped Apple achieve a record quarterly profit of $6.7 billion.
Despite falling short of expectations, Edward Jones financial analyst David Amann thinks Apple still has momentum.
"I think Apple's strategic position in their iPhone apps and their iTunes and with the migration of our digital entertainment to the Internet will allow them to recover," Amann said.
Intel managed to shrug off concerns that the sluggish economy might hurt demand for chips. It made a $3.5 billion quarterly profit, thanks to increased sales of notebook PC and server chips.
"While consumer demand in mature markets like Western Europe and North America remain soft, enterprise PC demand remains strong and consumer demand in emerging markets continue to rise year over year," Intel CEO Paul Otellini told reporters on a conference call.
Otellini cited demand rising 12 percent in China, 21 percent in India, 14 percent in Turkey and 23 percent in Indonesia as reasons why Intel is weathering a weak U.S. economy.
Sunnyvale-based Yahoo! reported a slide in earnings this past quarter. It posted a profit of $293 million, but that's a 26 percent decline from the same quarter a year ago. The reason was a drop in ad sales and search revenue.
Yahoo! didn't indicate whether it has lined up a new CEO or whether there's any news about a buyer.
"At the end of the day, I think investors should feel positive about Silicon Valley," Amman said. "It's a bright spot in our economy right now."
In case you're wondering, Apple's cash on hand is now in excess of $81 billion. It does not pay shareholders dividends. Intel's cash on hand is close to $15 billion. It will be paying just over $1 billion in dividends.
earnings, apple, yahoo, intel, silicon valley, business, david louie
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