Apple forecasts profit shy of predictions on iPad shortfall

S&Ps plunge after hours

Apple Inc. forecast profit and revenue that fell short of analysts’ predictions for the crucial holiday quarter as costs rose and customers held off on iPad purchases before the release of a new model.

Profit in the current period will be about $11.75 a share on sales of about $52 billion, Cupertino, California-based Apple said today in a statement. That compares with $15.49 a share on sales of $55.1 billion, the average of analysts’ estimates compiled by Bloomberg. Last quarter’s profit rose to $8.67 a share, shy of the $8.75 a share projected by analysts.

Apple sold 14 million iPads, fewer than the 15.3 million predicted by analysts in a Bloomberg survey, as customers delayed buying old versions of the tablet before the company released the iPad mini in the current quarter. While iPhone sales surpassed analysts’ predictions, sales of the device could be hampered should supply constraints persist. Costs also increased as the company rushed to get new products on store shelves ahead of the holidays.

“A lot of the products are new and when products get freshly introduced production costs are higher,” said Giri Cherukuri, portfolio manager at Oakbrook Investments LLC, which holds Apple shares.

Apple’s stock slipped 1.4 percent in late trading after the results were released. It had fallen 1.2 percent to $609.54 at the close in New York, and has slumped 13 percent since reaching a record the week iPhone 5 went on sale, related partly to the company’s struggle to keep up with demand.

Costs Increasing

While revenue rose 27 percent to $36 billion, operating expenses rose 29 percent to $3.46 billion, suggesting that Apple spent more to refresh its entire product line ahead of the holiday sales season. Research and development costs rose 40 percent.

Besides contending with iPhone part shortages, Apple is also grappling with increased competition in mobile-device markets it pioneered. It’s vying with Samsung Electronics Co. for leadership in global smartphones, and is squaring off with Amazon.com Inc., Google Inc. and Microsoft Corp., which have introduced iPad alternatives.

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