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Apple income jumps 21% to $8.82b in Q2

The company sold 26 million iPhones in the fiscal third quarter, shy of the 28.4 million predicted by analysts surveyed by Bloomberg. That caused Apple to miss analysts’ quarterly sales and profit estimates for the second time since 2003.

Customers delayed purchases of existing iPhone versions while awaiting the next model. Samsung Electronics releases several designs a year to defend its lead in the $219.1 billion smartphone market.

That raises the stakes for Apple chief executive Tim Cook, who relies on a once-a-year upgrade of the device that makes up half of the company’s sales.

“Pressure is mounting,” said Michael Obuchowski, a portfolio manager at North Shore Asset Management, an owner of Apple shares.

“Because everybody else has a much faster design cycle, Apple has to come up with a new phone that’s competitive not just when it comes out, but will stay competitive for a long period of time. That’s going to be increasingly difficult.”

Net income climbed 21 per cent to $8.82 billion, or $9.32 a share, in the June period, Cupertino, California-based Apple said. Sales rose 23 per cent to $35 billion. Analysts had predicted profit of $10.37 a share on revenue of $37.2 billion, the average of estimates compiled by Bloomberg.

Apple, the world’s largest company by market value, fell as much as 5.5 per cent to $567.83 in early trading. The shares had slipped less than one per cent to $600.92 at the close in New York on Tuesday, trimming the year-to-date gain to 48 per cent.

Slowing growth

While Apple is outgrowing its closest technology-industry peers, the company’s sales climbed at the slowest pace since mid-2009. Apple said the results will be worse during the quarter now under way, as chief financial officer Peter Oppenheimer said speculation about a new device “has caused some pause” in sales. Analysts are predicting a new iPhone will be released by October.

The company said sales in the quarter ending in September would fall to about $34 billion, and that profit would fall to $7.65 a share. That compares with predictions by analysts for sales of $38 billion and profit of $10.27 a share.