Apple admits to middle age truth: It's finally slowing down
No longer a world-beater, Apple still posted a solid second-quarter. But -- and here's the key -- it cautioned that sales in the current quarter are weakening.
Apple, which posted solid second-quarter results, but warned that business in the current quarter is far weaker than Wall Street analysts had been expecting.
The company said it expects revenue from the current quarter -- Apple's fiscal third -- to come in between $33.5 billion and $35.5 billion. Even if Apple hits the high end of its forecast, that's still more than $3 billion shy of the $38.6 billion expected by analysts polled by FactSet Research.
The company doesn't provide explicit profit guidance, a figure that analysts calculate on their own.
Apple also said its gross margins -- a key number, and one that has been shrinking in recent quarters -- for the third-quarter to come in between 36 percent and 37 percent, far lower than the 38.6 percent analysts had until today been looking for.
In the third-quarter of 2012, Apple posted quarterly revenue of $35.0 billion, and gross margin of 42.8 percent. So even if Apple posts a sales that are roughly flat with the year-ago period, the margins are narrowing, which puts pressure on the business.
"We acknowledge that our growth rate has slowed and our margins have decreased from the exceptionally high level we experienced in 2012," said CEO Tim Cook, talking on the company's conference call with analysts.
When asked about the narrowing margins, CFO Peter Oppenheimer said that pressure is coming from lower revenue and a different product mix to lower-margin devices. In the March quarter, he said, margins were hurt as the company sold more "iPads than planned" and amped up production of the iPad Mini.
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