Apple Profits Flat Despite Higher Sales As Margins are Cut

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Apple has reported its first fiscal quarter results and announced that its revenue rose to USD54.5 billion from USD46.3 billion a year ago. International sales accounted for 61 percent of the quarter's revenue.

Net profit was however flat at USD13.1 billion as the gross profit margin fell to 38.6 percent compared to 44.7 percent in the year-ago quarter. Profits were also slightly below analyst expectation and the first time in recent years that the company has not posted at least a double-digit profits increase.

The Company sold a record 47.8 million iPhones in the quarter, compared to 37 million in the year-ago quarter. Apple also sold a record 22.9 million iPads during the quarter, compared to 15.4 million in the year-ago quarter.

Although an increase on previous year, both numbers were below expectations by about a million year.

The company also saw sales of its Mac computer range shrink to 4.1 million, compared to 5.2 million in the year-ago quarter. Apple sold 12.7 million iPods in the quarter, compared to 15.4 million in the year-ago quarter.

"We're pleased to have generated over $23 billion in cash flow from operations during the quarter," said Peter Oppenheimer, Apple's CFO. "We established new all-time quarterly records for iPhone and iPad sales, significantly broadened our ecosystem, and generated Apple's highest quarterly revenue ever."

Apple shares fell more than six per cent to $481 in extended trading Wednesday, after the release of the financial results as investors worry about how the company can continue to grow and maintain its exceptionally high profit margins.

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