NEW YORK (AP) — Apple’s stock fell below $600 on Friday
for the first time in three months, after the consumer electronics
behemoth warned that costs of making new products will cut into profits
in the holiday quarter.
Apple’s earnings for the latest quarter also missed expectations.
Apple shares were down $11.26, or 1.9 percent, to $598.28 in afternoon trading.
Late
Thursday, Apple said profits for the rest of the year would fall from
last year because it’s launching so many new products. It’s expecting
mammoth sales, but new products are more expensive to make than older
ones.
Apple launched the iPhone 5 a month ago and announced two
new iPads and three new Macs this week. In addition, it’s shipping new
iPods.
Wall Street analysts took the adjustment in stride, knowing
that Apple nearly always lowballs its estimates, but several cut their
earnings estimates for the fiscal year that started this month. Stuart
Jeffrey noted that Apple’s profit margins should be back to normal in
the quarter that starts in April, but that will be too late to fully
make up for the earnings hit in the holiday quarter. He cut his earnings
estimate for the year by 10 percent and his price target on the shares
from $710 to $660.
Apple shares have now lost more than $100 from
their all-time peak of $705.07, hit on Sept. 21, the day the iPhone went
on sale in the U.S. and eight other countries. That’s a total loss to
investors of $106 billion. Apple remains the most valuable public
company in the world, by a wide margin, with a total market
capitalization of $556 billion.
Apple’s stock last fell below $600
following an earnings report as well. It missed expectations in the
previous quarter, too, something rare for Apple.
The Cupertino,
Calif., company started taking orders for the iPad Mini on Friday. The
new, smaller version of the iPad tablet starts at $329. Initial
shipments of the white model quickly sold out on Apple’s site; buyers
will now have to wait two weeks for delivery. The black model was still
available Friday afternoon for a one-week delivery.
Copyright 2012 The Associated Press.