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The world's most valuable technology company sold a record 51 million iPhones in the quarter, below the 55 million or so analysts had expected, reflecting intense competition from arch-foe Samsung Electronics during the crucial period.
The company forecast sales of $42 billion to $44 billion this quarter, which investors expect to be brisker than usual because of its recently sealed deal to sell iPhones through China Mobile Ltd, the country's No. 1 carrier. Wall Street is expecting $46 billion, on average.
The March quarter is especially important because of the China Mobile deal and the initial launch in that region. So the lower-than-expected revenue guidance was a troubling sign.
"The report for the December quarter was fine, but the real problem is the forecast for the March quarter," said Brian Colello, an analyst at Morningstar, Inc. "At the midpoint it's a 25% sequential drop versus 20% last year. Although the gross margin guidance looks good for March, the revenue certainly appears to be a shortfall."
That long-awaited China deal is expected by analysts to tack on more than 11 million units of new iPhone sales in fiscal 2014, starting with the typically sedate March quarter.
The company on Monday recorded sales of $57.6 billion in its December or fiscal first quarter, versus expectations for about $57.5 billion. First fiscal quarter earnings were $14.50 a share, compared to Thomson Reuters I/B/E/S estimate of $14.07.
Apple also sold a record 26 million iPads in the quarter, in line with Wall Street estimates.
