Apple reports flat first-quarter earnings; shares drop 5%

Apple Inc. reported flat fiscal first-quarter earnings, sending shares plummeting 5% in after-hours trading.

Apple said revenue increased 18% to $54.5 billion in the first quarter, which ended in December. Profit rose only slightly to $13.08 billion, or $13.81 a share, from $13.06 billion, or $13.87, a year earlier.

Apple had previously told Wall Street analysts that for its first quarter, investors should expect the company to report $52 billion in revenue and $11.75 a share in earnings. The consensus among Wall Street analysts was that Apple would report $54.7 billion in revenue and $13.41 a share in earnings.

LIVE UPDATES: Apple shares plunge as earnings disappoint

In addition, Apple said it sold a record 47.8 million iPhones in the last quarter, up from the 37 million iPhones it sold in the same quarter in 2011. The company sold 22.9 million iPads, also a record, up from 15.4 million.

Despite the record number of iPhones sold, some analysts were expecting more.

“Meeting expectations is not enough for Apple,� said Colin Gillis of BGC Financial. “People are looking on the north side somewhere of 50 million phones. So that’s a little bit of a disappointment…. International sales were a little weaker than people expected. So we’ll see how that shakes out.�

“Overall, compared to other companies, it’s impressive,� said Patrick Moorhead of Moor Insights & Strategy. “But for Apple’s standards, it’s not great, but really good.

“I do think this somewhat fuels the perception that Apple is slowing down a bit, in terms of being able to consistently set expectations. And it’s driven by the fact that some of its competitors are catching up, and in some markets have already caught up.�

Immediately after the numbers were released, Apple’s stock fell 4.5% to $490.48 in after-hours trading. During regular trading, shares rose $9.24, or 1.8%, to $514.01.

At 2 p.m., the company began its earnings calls with analysts. The Cupertino, Calif., company could hint at its upcoming plans for cheaper iPhones, new iPads and possibly some long-awaited TV news, although it seems unlikely for the typically tight-lipped company. Still, expect analysts to try their best to finagle information from Chief Executive Tim Cook and other company executives during the question-and-answer portion of the call.

For the current quarter, Apple said it expected revenue of $41 billion to $43 billion, gross margin of 37.5% to 38.5% and operating expenses of $3.8 billion to $3.9 billion.

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