A surprising drop was seen in Apple’s shares as the company fell by 7% during after-hours trading. This came unexpected by many because the company has performed quite well in the market. Expectations were high for Apple as its profits were predicted to go beyond $4.3bn for the last quarter.
After closing time in the New York stock exchange, the company was reported to be up by 70%. But after which, company shares started taking a downfall, to the complete surprise of traders.
The reason for such an unexpected drop was largely caused by speculators who started selling their shares due to lack of profits. In the past few days, Apple’s shares have reached an all time high and were probably experiencing a state of plateau.
The announcement just came before Nasdaq exchange came to a close. During which, Apple’s shares were reported to be up more than 50% since the month of March at $318.30.
Since the release of Apple’s new iPad tablet computer in the market, expectations were set at an all time high. The after-hours selloff was largely attributed to the new product coming short at a mere $4.2 million in profit – so much lower than expected.
Compared to the previous quarter, this value was just 28% of the net profit that they have earned before.
But to cushion their new product’s bad performance, other products, such as iPhone4 did not get as much bad publicity as expected over complaints of a defective antenna and is still performing fairly well in the market. Currently, the firm has sold 14.1 million smart phones over the quarter.
Because of the strong iPhone sales, total revenues rose to $20bn, which already exceeded the expected values by a billion Dollars.
Meanwhile, Macintosh computer sales are up by 27% and iPods are down by 11% due to the current popularity of smart phones.
Jenny Jabobski,
Online News Heard Now