Gadget maker Apple reported its fourth straight quarter of lower profits on Monday and forecast slimmer profit margins for the holiday period — but investors largely shrugged off the bad news.
The Cupertino, Calif., company said net profit fell to $7.5 billion, or $8.26 per diluted share, for the quarter ended Sept. 30, down from $8.2 billion, or $8.67, last year.
Revenues were up, but only slightly, to $37.5 billion.
Apple shares ping-ponged from declines to advances in after-hours trading as investors tried to make sense of the improved July-September news and the less-stellar forecast.
The stock was down 1.22 percent from its closing price, to $523.43, by the end of the day.
If the forecast by CEO Tim Cook holds, the current holiday quarter will be the first with single-digit sales increases in 10 years.
“People aren’t going to be excited until they see a definitive return to growth,” Daniel Ernst, an analyst with Hudson Square research, told Bloomberg.
Apple shareholders have already suffered a decline of more than 12 percent in the last year as revenue growth was constrained amid heightened competition from other smart-phone and tablet makers, like Samsung and Google.
For the most part, Wall Streeters have focused their sights on the future amid expectations that Apple could start to see a return to growth as Cook rolls out a stream of new and improved products, starting with the thinner, lighter and more powerful iPad Air that was launched last week.
Cantor Fitzgerald analyst Brian White, for example, has set a price target of $777 on hopes for a new string of innovation, including the iWatch.
On Monday, Apple said it sees revenue for the quarter ending Dec. 31 coming in between $55 billion and $58 billion, compared to revenues of $54.5 billion in last year’s first quarter.
“I think its going to be an iPad Christmas,” Apple CEO Tim Cook told investors and analysts in a call to discuss earnings. He called the iPad Air, which weighs just one pound, “The best iPad we have ever done.”
Cook sure could use the boost if he’s right.
The forecast for single-digit sales growth in the current quarter compares to a 73.3 percent revenue spike during Cook’s first quarter as CEO, according to data from FactSet.
But they have been declining almost steadily each year and until this year when revenue growth hit the low-single digits, including a measly 2.5 percent growth in the third quarter.
Cook on Monday also hinted that billionaire investor Carl Icahn may need to wait until 2014 to learn whether Apple intends to “announce any changes” to its capital allocation program, including buybacks and dividends, “in the first part of new calendar year.”
Icahn, who has been asking Apple to increase its buyback program to $150 billion from $60 billion over three years, recently said he would consider fighting the company for board seats if he doesn’t get his way.