/// Apple Says Lowered Guidance Comes From So Many Redesigned Products at Once

October 25, 2012  |  All Things Digital


Apple is projecting a rare earnings-per-share decline, based on lowered guidance for the next quarter, of $11.75 earnings per share and revenue of $52 billion. The expectation was $15.43 earnings per share and $55 billion in revenue. The decline is in part because of just-announced revamps of nearly every Apple hardware product going into the holiday season. “There are costs associated with such dramatic change,” said Apple CFO Peter Oppenheimer on today’s quarterly earnings call with analysts . “We never before introduced so many new form factors at once.” Oppenheimer called the upcoming period “the height of the cost curve,” saying that this always happens with new products but that they are often more spaced out. He noted that Apple also lowered the price of older iPhones and is putting pressure on its own margins. It’s not just Apple’s new products that are thin. Where critics said the new iPad mini seems expensive, Oppenheimer contended that its gross margin is “significantly below the corporate average.” He also noted that more than $50 billion of demand in a single quarter is no joke. Apple CEO Tim Cook chimed in to say that Apple is managed for the long run, so it is “dedicated to making the very best products in the world” and “unwilling to cut corners.”

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Apple Says Lowered Guidance Comes From So Many Redesigned Products at Once


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