Apple Inc. plunged the most in more than two years after posting the slowest profit growth since 2003 and the weakest sales increase in 14 quarters, fueling concern that mounting costs and competition may curtail growth.
The shares dropped 9.7 percent to $464.08 at 10:37 a.m. in New York, and earlier touched $450.66 for the biggest intraday decline since May 2010. Fiscal first-quarter profit rose less than 1 percent to $13.1 billion, or $13.81 a share. Sales climbed 18 percent to $54.5 billion, compared with 73 percent growth in the same period a year ago.
Yesterday’s results underscored the rising costs of product overhauls amid competition from Samsung Electronics Co. in the saturating smartphone market. Even as Chief Executive Officer Tim Cook guided Apple to record revenue and iPad and iPhone sales, investors worry about management’s ability to keep producing hit products more than a year after the death of co- founder Steve Jobs.
“People are concerned about how quickly sales are falling off after the initial product launches and whether the company can deliver new and interesting products to reignite growth,” said Walter Piecyk, co-head of research at BTIG LLC in New York.
Apple suppliers also declined. Assembler Hon Hai Precision Industry Co. dropped 2.9 percent in Taiwan and speaker-maker AAC Technologies Holding Inc. plunged 6 percent in Hong Kong. Samsung, which makes chips for Apple, fell 1.4 percent in Seoul.
Circuit-maker Cirrus Logic Inc. retreated 8.4 percent to $27.43 at 10:37 a.m. in New York, while Fusion-io, a producer of flash-memory, decreased 2.8 percent to $20.91.
At least 15 analysts cut their price estimates for Apple shares. The average target is $656.79, down from $716.94 the day before the earnings report, according to data compiled by Bloomberg.
Apple introduced the iPhone 5, iPad mini and a restyled Mac to draw customers in time for the first fiscal quarter, typically its most lucrative.
The company’s share price decline has shaved about $175 billion from its market capitalization since a September peak and means the company may lose its status as the world’s most valuable company to Exxon Mobil Corp. Apple fell in extended trading to as low as $457.30. The shares rose 1.8 percent to $514.01 at the close in New York yesterday, leaving it with a market value of $482.7 billion, compared with Exxon’s $413.5 billion.