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Apple Guidance Stinks

Apple admits to a lot of backlog and says it has no idea when supply and demand will even out

Apple's record earnings came in a bit short of expectations Thursday, a situation the smart money attributed to its failure to make enough phones although it still sold an amazing 26.9 million of the things, up 58% year-over-year and good for $17.13 billion, into the expected launch of the new iPhone 5, which only came out at the very end of the third quarter.

Apple admits to a lot of backlog and says it has no idea when supply and demand will even out.

It earned $8.67 a share on revenues of $35.97 billion. It was expected to realize $8.75 a share on $35.86 billion.

Apple sold 14 million iPads during the quarter, up 26% year-over-year, to $7.51 billion, less than the 17.5 million Wall Street originally anticipated and than rejigged to 15 million after Apple said Tuesday it sold 100 iPads since the beginning.

Still Apple claims almost all of the Fortune 500 are testing or deploying the iPad and it's pushing "aggressively" into the Global 500, putting it at above 80%.

It also sold 4.9 million Macs, up 1% to $4.9 billion, and 5.3 million iPods, down 19% to $820 million. All three product categories came in below expectations.

International sales accounted for 60% of the quarter's revenue.

Gross margin was 40% compared to 40.3% last year.

Year-over-year the company was up handsomely.

However, it guided to a God awful $11.75 a share this quarter, way less than the $15.43 a share expected on revenues of $52 billion versus the $55 billion expected despite the advent of the iPad mini the other day as well as the upgrade of the standard iPad.

Apple says its gross margin will only be 36% against the 43% expected and the dollar is stronger. The new products also reportedly cost more.

Of course, since Apple is famous for underplaying its guidance and although this Q4 is 13 weeks unlike last week's 14 weeks - nobody seems to believe its forecast. Guess it remains to be seen exactly what it can deliver.

Apple is now sitting on a monster $121.3 billion, up from $117 billion. It declared a quarterly dividend of $2.65 a share payable November 15 to shareholders of record as of the close of business on November 12.

It expects to be covering 100 countries with new products by the end of the year. Its 190 stores are averaging $11.2 million and each see 19,000 visitors a week. It's had 190 million iCloud sign-ups. It's paid App Store developers a total of $6.5 billion.

More Stories By Maureen O'Gara

Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

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