In the fourth quarter earnings seasons, most of the analysts turned bearish on Apple on their disappointing sales growth in the smart phone business. But, Apple’s earnings came in well below street estimates which was quite a shocker.

The fall in earnings, i.e., profits and revenues for the company made the investors more nervous and they started selling the stock sending its shares down 10 percent from its previous close.

In today’s trading session, shares of Apple came down to 463 dollars from the previous price of per share, $514. It fell nearly 10% from the previous price in today’s trading session and that is one steep fall seen by a blue chip in many months. In this session, the shares of Apple shove out nearly $50 billion of its market value.

According to Apple’s management, they said that they were happy to see such achievements in the margin of earnings, but most of the analysts argue that the company’s results are well below what they expected and they feel that the company will not be able to recover soon from the slow down in smart phone sales and other businesses.

Tough competition from Samsung and other smart phone makers is keeping the revenues and sales growth of Apple in check. If this continues, the stock will find itself difficult to move higher from here.

Shaw Wu, a Sterne Agee analyst said that- \”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, 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.\”

According to Thomson Reuter’s, “Apple projected revenue of $41 billion to $43 billion in the current, second fiscal quarter, is lagging the average Wall Street forecast of more than $45 billion. Fiscal first quarter revenue rose 18 percent to $54.5 billion, below the average analyst estimate of $54.73 billion, though earnings per share of $13.81 beat the Street forecast of $13.47, 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.”

Summing up the year 2012, the company came up with a net income of $13.07 billion. Such a growth is being considered as a virtually flat growth because a year ago, the net income of this company was 13.06 billion dollars. The company has seen some excellent growth in the first half of the previous financial year, but the second half was a disaster.

Such backlash in the share price of Apple is assumed to happen because of the interventions of smart phones from Samsung that has kept its bold grab on the market since last year.

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Category: Finances
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