Apple stock plunges after earnings disappointment

Apple shares plunged at the open Thursday as markets reacted to a disappointing outlook from the US tech giant despite its record quarterly profits.

The shares, which had topped $700 last year, slid 11.3 percent to $455.56 as markets opened, before trading in the shares was suspended due to the sharp decline.

"We don't think the Apple growth story is over but shares will likely languish until confidence is restored," said Sterne Agee analyst Shaw Wu.

Apple said Wednesday it made a profit of $13.l billion on revenue of $54.5 billion in the fiscal quarter that ended on December 29 as sales of iPhones and iPads set quarterly highs.

The California-based company reported that it had sold 47.8 million iPhones and 22.9 million iPad tablet computers in the closing months of 2012.

Despite the figures, investors soured on Apple after it forecast that its revenue for the current quarter would range from $41 to $43 billion and it would have a gross margin of 37.5 to 39.5 percent.

Apple has been long known for a high margin, the difference between what it charges for products and the cost to make them.

"Apple's profit did go up; it just didn't go up that much," said analyst Rob Enderle of Enderle Group in Silicon Valley.

"They had a really high increase in sales, but their high margin is coming apart at the edges and that is why investors are fleeing the stock," the analyst continued. "They are making less per gadget."

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