Shares of Apple Plunge Following Weak Outlook

Authored by Mark Hefflinger on January 23, 2008 - 10:28am.

Cupertino, Calif. - Shares of Apple (NASD: AAPL) slid nearly 11% on Wednesday after the company said that its second-quarter earnings are likely to be weaker than expected. CFO Peter Oppenheimer said that the company expects to earn $0.94 a share on revenue of $6.8 billion, well below consensus analyst estimates of $1.09 and $6.99 billion, respectively, according to Thomson Financial.

Apple's guidance, however, has historically been conservative, and some analysts believe the company eventually will raise its estimates.

The sell-off occurred a day after the company reported a first-quarter profit of $1.58 billion, up from $1 billion a year ago, on revenue of $9.6 billion, up from $7.12 billion.

During the quarter, Apple sold 22.1 million iPods and 2.3 million Macintosh PCs.

Shares of the company plunged as low as $126.14 on Wednesday before recovering to close at $139.07.