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San Francisco - Apple Inc. shares fell after the world’s most-valuable company reported sliding prices for its smartphones and forecast lower-than-expected profitability over the holiday period.
In its latest fiscal quarter, which ended September 24, Apple said it sold 45.5 million iPhones, with an average price of $618.72.
That was down from $670 a year earlier and below analysts’ estimates of $625.
The company said gross margins, a closely watched measure of profitability, will be between 38 percent and 38.5 percent in the three months through December.
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That compares with analysts’ forecasts of 38.9 percent.
Apple shares fell 2.3 percent to $115.55 in extended trading on Tuesday.
The stock closed at $118.25 in New York trading earlier. It had rallied 22 percent in the last three months.
Apple, which gets two thirds of revenue from the iPhone, experienced its first annual sales decline since 2001, amid waning smartphone demand.
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Global handset shipments will rise 1.6 percent this year, down from 10 percent growth in 2015, IDC estimated last month.
That’s increased pressure on Apple to find its next blockbuster product to drive growth.
Revenue in the three months through December will be between $76 billion and $78 billion, Apple said Tuesday.
Analysts estimated $75.38 billion, according to data compiled by Bloomberg.
In its latest fiscal quarter, which ended Sept. 24, Apple said it sold 45.5 million units.
Analysts surveyed by Bloomberg expected 45 million.
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While the iPhone 7 was similar to its predecessor, Apple executives expect the device to help revive sales ahead of a more substantial upgrade in 2017.
“We are confident that we can return to growth because we see that the response from customers to the 7 and 7 Plus is really positive,” Apple Chief Financial Officer Luca Maestri said in a telephone interview.
Chief Executive Officer Tim Cook said the company was "thrilled with the customer response" to the new iPhones.
He also highlighted growth of Apple’s Services business.
For its fiscal fourth quarter, Apple reported net income per share of $1.67, down from $1.96 a share a year earlier. Revenue fell 9 percent to $46.9 billion.
Analysts expected profit of $1.66 a share on sales of $46.9 billion, according to data compiled by Bloomberg.
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Competitor Samsung Electronics Co. recently ended production of its flagship Galaxy Note 7 handset after some of the smartphones caught fire.
That may create an opportunity for Apple, even as the introduction last month of a competing phone from Alphabet Inc.’s Google presents a greater competitive threat in future years.
Cook spent much of the past year pushing Apple’s services, such as the App Store, iCloud storage and Apple Music.
That division has become the company’s fastest growing.
Though those businesses represent a fraction of iPhone revenue, they foster customer loyalty by making it harder to trade in handsets for those made by rivals.\
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