SAN FRANCISCO (AP) — Apple's quarterly earnings are still sagging even as sales of its iPhones are rising, a vexing phenomenon feeding investor worries about whether stiffer competition in the mobile device market will continue to undercut the company's prosperity.
The fiscal fourth-quarter results announced Monday closed the books on a sobering year that saw Apple's market value plunge by about 25 percent, or about $160 billion. Apple Inc. remains the world's most valuable company, despite the downturn.
The company's earnings have been shrinking along with its share of the smartphone and tablet computer market that Apple reshaped with the 2007 release of the first iPhone and the 2010 introduction of the iPad. Apple hasn't come up with another breakthrough product in a new category since then, raising questions about the company's ability to innovate following the death of co-founder and chief visionary Steve Jobs two years ago.
Apple's earnings have now fallen from the previous year in three consecutive quarters after a decade of steady growth.
The Cupertino, Calif., earned $7.5 billion, or $8.26 per share, during the three months ending Sept. 28. That compared to income of $8.2 billion, or $8.67 per share, last year.
The latest quarterly earnings topped the average estimate of $7.92 per share among analysts polled by FactSet.
Revenue rose 4 percent to $37.5 billion — about $600 million above analyst predictions.
Investors were evidently hoping for a better showing and, perhaps, a more optimistic forecast for the current quarter, which covers the crucial holiday shopping season. Management predicted Apple's revenue will range from $55 billion to $58 billion in the quarter ending in late December. Analysts had projected revenue of $55.6 billion. Apple also indicated that its profit margins would be in the same range as the past quarter.
Apple's stock dipped $6.45, or about 1.2 percent, to $523.43 in extended trading after the numbers came out.