iPhone disappointment fans doubt on Apple growth Apple missed Wall Street’s revenue forecast for the third straight quarter after iPhone sales came in below expectations, fanning fears that its dominance of consumer electronics is slipping. On Wednesday, Apple said it shipped a record 47.8mn iPhones in the December quarter, up 29% from a year earlier. But that lagged the 50mn that analysts on average had projected. Apple shares slid 9.9% to $462.96 in early trade yesterday, extending the decline from record highs above $700 last year. Expectations heading into the results had been subdued by news of possible production cutbacks by some component suppliers in Asia, triggering fears that demand for the iPhone, which accounts for half of Apple’s revenue, and the iPad could be slowing. But some investors clung to hopes for a repeat of years of historical outperformance, analysts said. “It’s going to call into question Apple’s dominance in the space. It’s still one of the strong players, the others being Samsung and Google. It’s still a two-horse race, but Android continues to grow rapidly,” said Sterne Agee analyst Shaw Wu. “If you step back a bit, it’s clear they shipped a lot of phones. But the problem is the high expectations that investors have. Apple’s conservative guidance highlights the concerns over production cuts coming out of Asia recently.” Apple is forecasting revenue of $41bn to $43bn in the current, second fiscal quarter, lagging the average Wall Street forecast of more than $45bn. Fiscal first-quarter revenue rose 18% to $54.5bn, below the average analyst estimate of $54.73bn, though earnings per share of $13.81 beat the Street forecast of $13.47, according to Thomson Reuters I/B/E/S. Apple also undershot revenue targets in the previous two quarters, and these results will prompt more questions on what Apple has in its product pipeline, and what it can do to attract new sales and maintain its growth trajectory, analysts said. Net income of $13.07bn was virtually flat with $13.06bn a year earlier on higher manufacturing costs. The year-ago quarter also had an extra week compared to this year. Gross margins consequently slid to 38.6%, from 44.7% previously. “You can’t just keep rolling out iPhones and iPads and think that everybody needs a new one,” said Jeffrey Gundlach, who runs DoubleLine Capital, the $53bn bond firm. “The mini? What is that all about? It is a slightly smaller iPad - so what? So that is our new definition of innovation?” “There are plenty of competitors like Samsung and other legitimate competitors like them,” added Gundlach, one of the highest-profile Apple bears. He maintains a $425 price target. United Continental United Continental Holdings posted a bigger fourth-quarter loss yesterday, hobbled by higher costs, lower revenue and charges. The airline has been working to win back customers who turned to rival carriers after technology changes it made to unify operations following its 2010 merger hurt service last year. The world’s largest carrier said its quarterly net loss widened to $620mn, or $1.87 a share, from $138mn, or 42¢ a share, a year earlier. It took charges of $430mn in the quarter, with much of that tied to paying off pension debt and costs for systems integration and training and severance. Excluding items, United said the 2012 quarterly loss was 58¢ a share, compared with a 61-cent loss expected by analysts on average, according to Thomson Reuters I/B/E/S. Revenue fell 2.5% to $8.7bn. Passenger revenue per available seat mile, a measure of pricing power and how full planes are, rose 0.6% in the quarter. Operating costs rose 3.2%. Although fuel costs edged down 0.3%, expenses for salaries and maintenance materials were 4% and 9.2% higher, respectively. Baxter Baxter International yesterday reported higher quarterly earnings as sales strengthened, especially in the US, and forecast sales growth of 10% for 2013. Separately, Baxter said it had agreed to acquire an investigational hemophilia compound for an upfront payment of $50mn and additional payments of up to $20mn based on winning regulatory approvals in the US and elsewhere. Baxter, a maker of blood therapy products, medical infusion pumps and equipment for kidney dialysis, said fourth-quarter net profit was $494mn, or 89¢ per share, up from $463mn, or 82¢ per share, a year earlier. Excluding one-time items, Baxter earned $1.26 per share, matching the average estimate on Wall Street, according to Reuters I/B/E/S. Sales rose to $3.75bn from $3.59bn. For the current quarter, Baxter forecast earnings of $1.03 to $1.05 per share before special items, with sales growth of 2% to 3%. For the full year, it expects earnings of $4.60 to $4.70 per share before special items, and cash flow from operations of $3.3bn. EasyJet British budget airline easyJet said quarterly revenue rose 9.2%, after it attracted more business travellers by adding flights on routes where rivals have cut capacity. EasyJet also benefited from extra services, such as flexible tickets and allocated seating, it has started offering in a bid to steal business customers from legacy carriers such as IAG’s British Airways. Demand for flights between London, Geneva, Milan, Paris and Rome were especially strong during the three months to December - easyJet’s first quarter, a spokesman said on Thursday. Europe’s second-largest budget airline behind Ryanair said first-quarter revenue rose to £833mn ($1.2bn), with passenger numbers up 6.2% to £13.7mn. Costs per seat, excluding fuel, rose 0.5%. The airline, which will start services between London, Manchester and Moscow later this year, said it was now carrying 10mn business passengers annually. LG Display LG Display Co, a major supplier of iPad and iPhone screens, said its LCD panel shipments would slide this quarter, underscoring worries about weaker growth for Apple Inc products, and taking the shine off forecast-trouncing results. Fears that demand for the iPhone and the iPad could be slowing have been triggered by news of possible production cutbacks by some component suppliers in Asia and were exacerbated after Apple reported weaker-than-expected iPhone sales in its quarterly earnings. The South Korean company said some clients were cutting orders and it expect LCD panel shipments to decline by around 15% in the first quarter from the previous quarter. A first-quarter fall in profits will come, however, after a very strong fourth quarter that saw LG Display book 587bn won ($550mn) in operating profit, one-third higher than the market consensus and up from an operating loss of 155bn won for the same period a year earlier. Hyundai Motor South Korea’s Hyundai Motor reported a 12% increase in net profit for 2012, despite the twin challenges of a strengthening won and a global downturn that sapped demand. Consolidated net profit was 9.05tn won ($8.4bn) last year, compared with 8.1tn won in 2011, the country’s top automaker said in a statement. Operating profit reached an annual record of 8.4tn won, up 5.1% from a year ago. Sales rose 8.6% to also reach an annual record of 84.4tn won. “Sluggish domestic sales that lasted through last year, the won’s strength and the yen’s weakness put pressure on the quarterly results,” the statement said. The company saw its fourth-quarter net profit fall 5.5% from a year ago to reach 1.8tn won. Operating profit for the October-December period also tumbled 11.7% to 1.8tn won. Hyundai, together with its smaller affiliate Kia, is the world’s fifth-largest automaker. The Seoul-based auto giant sold 4.4mn cars worldwide in 2012, up 7.0% from 2011, and said Thursday it planned to sell 4.6mn cars this year. Sales in China, the world’s top auto market, soared 12% to reach 847,000 units last year, while sales in the number two market, the US, rose 8.9%. Sales in recession-hit Europe also climbed 10.2% to 444,000 units. The firm—along with the South’s other major exporters—faces the challenge of a strong won, which threatens to further erode profits and weaken its competitiveness against Japanese rivals like Honda and Toyota. Tiger Airways Budget carrier Tiger Airways Holdings, one-third owned by Singapore Airlines, reported a third-quarter net profit of S$2mn ($1.6mn), the first time in seven quarters it made money. Despite a boost from its Singapore business, Tiger expects its operating performance to be weaker in the fourth quarter and forecast an operating loss for the year to March 2013, said the carrier, which has associate airlines in Indonesia and the Philippines. After taking charge in August, new group chief executive Koay Peng Yen struck a deal to sell a stake in its loss-making Australian unit and entered into other partnerships, but faces a big challenge in a fiercely competitive Southeast Asian market. Tiger reported a third-quarter profit compared to a net loss of S$17.4mn a year earlier. Its nine-month loss contracted to S$30mn, from S$87.9mn a year earlier. Amgen Amgen on Wednesday projected revenue for 2013 that exceeds Wall Street estimates and said it was on track to deliver on its 2015 forecasts well ahead of schedule. The world’s largest biotechnology company forecast 2013 revenue of $17.8bn to $18.2bn and adjusted earnings of $6.85 to $7.15 per share. Analysts on average are looking for revenue of $17.7bn and earnings of $6.99 per share, according to Thomson Reuters I/B/E/S. The 2013 forecast suggests “that they expect good momentum from 2012,” RBC Capital Markets analyst Michael Yee said. “They have a history of guiding conservatively and then beating.” The company was true to that history on a call with analysts and investors. Amgen previously targeted 2015 revenue of $16bn to $18bn and adjusted earnings of $7.25 to $8.60 per share. On Wednesday, Amgen management said it was on track to hit the upper end of its 2015 revenue guidance two years early and the EPS forecast at least one year early. Net profit for the fourth quarter fell as sales of some key products declined and R&D spending and other costs jumped. Excluding items, Amgen had adjusted earnings of $1.40 per share, topping analysts’ average expectations by 2 cents. Net profit fell to $788mn, or $1.01 per share, from $934mn, or $1.08 per share, a year ago. Nokia posts profit, waives dividend Nokia, once the world’s biggest mobile phone maker, yesterday posted a net profit of €202mn ($269mn) in the fourth quarter, its first quarterly profit for 18 months. The beleaguered company, which is trying to cut costs, said that it would not pay a dividend to shareholders for the first time for more than 20 years. “We are very encouraged that our team’s execution against our business strategy has started to translate into financial results,” chief executive Stephen Elop said in a statement. In the three months ending December 31, Nokia made a net profit of €202mn compared to a loss of €1.07bn in the same quarter a year ago, when results were hit by a goodwill impairment charge in its Location and Commerce unit. An average of 11 analysts polled by Dow Jones Newswires had expected a fourth-quarter net loss of 156mn euros. Shares in Nokia soared earlier this month when it revealed an 8% increase in fourth quarter sales in its Devices and Services unit to €3.9bn ($5.14bn). The company sold a total of 86.3mn devices during the quarter, including 4.4mn Lumia smartphones, its new flagship product developed with Microsoft. The company’s net cash position, which is closely watched by investors, stood at €4.4bn, compared with €3.6bn at the end of last quarter. Nokia dominated the international mobile market for more than a decade but has of late lagged behind smartphone rivals such as Apple and Samsung, and credit rating agencies have downgraded the company due to concerns over its profitability and its cash position.