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A spike in iPad demand wasn't enough to offset slower iPhone sales in the third quarter as Apple Inc. reported lower-than-expected revenues, sending its after-hours stock price on a 5 percent dive.
The company announced third-quarter revenue of $35 billion, or $9.32 per share; earlier, Bloomberg had projected $37.22 billion, or 10.37 per share.
It's only the second time since 2003 that Apple's profit and sales failed to meet projections, Bloomberg reported.
Apple said its quarterly net profit rose to $8.8 billion, or $9.32 per share, compared with a net profit of $7.3 billion, or $7.79 per diluted share, in the same quarter a year ago. Its revenue in that quarter was $28.6 billion.
The numbers were blamed on sluggish sales of the iPhone, Apple's No. 1 revenue source. The company sold 26 million iPhones; that was 28 percent higher than during the same quarter last year, but analysts surveyed by Bloomberg had expected sales of 28.4 million units.
Customers, anticipating a new model of the iPhone this fall, appeared to be holding off buying the existing model.
"Every quarter that Apple isn't launching a new iPhone it's a transition quarter," Brian Marshall, an analyst at ISI Group, told Bloomberg. "That's the key product that matters."
Sales of the iPad tablet, meanwhile, spiked 84 percent compared with a year earlier. Apple sold 17 million iPads, compared with the 15.4 million expected.
Bloomberg also reported:
"Looking ahead to the current quarter, Apple forecast revenue of about $34 billion and profit of $7.65 a share. That compares with predictions by analysts for sales of $38 billion and profit of $10.27 a share."
After what was a bruising day for most of the market because of concerns about the European economy, Apple's stock price dropped by more than 5 percent, to $570 a share, after hours.
Still, on a year-on-year basis, profits were up around 20 percent, as Matthew Yglesias wrote on Slate.
"The interesting thing is that one month ago, Apple had a price:earnings ratio of 14 which is exactly what you would expect from a company deemed to be in good shape but not poised for any breakthrough earnings growth. Yet 20 percent was disappointing. Market psychology is a curious beast."