Investors are spooked about consumer spending, and Tuesday they took it out on Apple Inc.
The maker of the iPod and Macintosh computer saw its stock fall 3.5%, then plunge an additional 11% in extended trading, after its fiscal first-quarter earnings didn't beat Wall Street's expectations enough and its forecast for the current quarter fell short of estimates.
"Investors are so trained right now to be fearful of the future," said Gene Munster, an analyst with investment bank Piper Jaffray. "Investors are worried something is going to slow down the high-end consumer."
It didn't matter that the Cupertino, Calif., company reported its highest-ever quarterly profit and revenue. It was a given that Macintosh sales jumped more than the competition's, that profit margins on iPods grew and that the company still expected to sell 10 million iPhones by the end of this year.
With all the talk about recession, investors focused more on Apple's conservative forecast. Shares fell $5.72 to $155.64 before the earnings release, then tumbled to $138.50 after-hours.
"Nothing changed on their part," said Andy Hargreaves, an analyst with Pacific Crest Securities. "They gave a conservative guidance as they have in the past. But the sentiment in the market is so much more negative that people are latching on to that."
Investors have loved Apple's turnaround story, its booming iPod and Mac sales and its position as a dominant player in digital entertainment. Its shares reached a record closing price of $199.83 on Dec. 28, making it, like Google Inc., one of the high-tech blue chips.
But the stock has been falling ever since. The same excitement that pushed the stock up has now turned into a mild panic, industry analysts said. Mountain View, Calif.-based Google has tumbled too, to $584.35 on Tuesday from its record closing price of $741.79 on Nov. 6.
Apple reported a 35% rise in revenue for its fiscal first quarter, which ended Dec. 29, to $9.6 billion, beating analysts' prediction of $9.5 billion. Profit jumped 58% to $1.58 billion from $1 billion. Earnings per share of $1.76 beat analysts' expectations by 14 cents.
The company said it shipped 2.3 million Macintosh computers, 44% more than during the same period last year.
"The Macintosh business is on fire," said Peter Oppenheimer, Apple's chief financial officer. "We remain very confident in our business and in our products and in our strategy."
