As investors pummeled Apple Inc.’s stock over a disappointing financial outlook, a key question remained about the results: Just how badly will the company be hurt by slowing economic activity in the United States and fears of a recession?
Wall Street interpreted the Cupertino-based company’s guidance for the current quarter, released after the market closed Tuesday, as a sign that weakening consumer spending will hurt Apple in 2008 and that even a hot company like Apple isn’t immune from the broader economic pressures weighing on the stock market.
Apple executives noted, however, that the company’s forecast for the fiscal second quarter calls for sales growth of 29 percent, which is faster than in previous years, even if it is slower than Wall Street was expecting. The company said that because of booming holiday sales, Apple notched the highest quarterly revenue and earnings in its history.
“Our business performed very well in the December quarter, and we remain very confident in our products and our strategy,” said Apple Chief Financial Officer Peter Oppenheimer.
Still, disappointed investors punished Apple, sending its shares down $17.71, or more than 11 percent, to $137.93 in after-hours trading Tuesday.
Apple’s stock, seen as a refuge from the market’s turmoil during the second half of 2007, has declined sharply, wiping out more than $40 billion in shareholder wealth since the end of December, when shares hit their 52-week high of $202.96.
Shareholders had hoped Apple’s first-quarter results, which cover the last three months of the year, would be a high point in a market otherwise marred by bad news. Instead, the company became emblematic of Tuesday’s broader market tumble, which saw the tech-laden Nasdaq composite index fall 2 percent.
Some analysts said fear about slowing consumer spending was overblown in response to Apple’s results and the company may have been a victim of its…