Apple outlook well below Wall Street view

Apple Inc said on Monday its current-quarter earnings would be well below Wall Street targets, sending shares of the iPhone, iPod and Macintosh maker down 10%.
Apple has a reputation for conservative financial forecasts, and it posted third-quarter earnings on Monday that swept by its own target and those of Wall Street, leaving some analysts including Pacific Crest Securities' Andrew Hargreaves sure that the company was playing an old game.
"Their outlooks aren't based in reality," he said. "I think it is them doing what they do, which is guiding extremely conservatively and then beating their own numbers."
Fading consumer spending has knocked down profits of many U.S. companies, and reports from Google Inc and Microsoft Corp unnerved investors last week.
But Apple posted record Macintosh computer sales, widely seen as proof that many buyers of iPhones and iPods go on to buy its mainstay product too.
"Given the results that we just posted, it's hard to see any obvious impact of the economy," Chief Financial Officer Peter Oppenheimer told Reuters. "We expect to sell more Macs in the September quarter than we did in June."
But he said back-to-school promotions and investments would cut profit margins, and Pacific Crest's Hargreaves said the CFO was similarly dour last year in his outlook.
Apple forecast September-quarter earnings of $1.00 per share, below the Wall Street target range of $1.13 to $1.41 per share and badly lagging the average of $1.25. Apple's revenue target of $7.8 bln trails Wall Street's $8.3 bln view for its fiscal fourth quarter, according to Reuters Estimates.
Apple's third-quarter net income of $1.07 bln or $1.19 per share came in 11 cents per share ahead of Wall Street targets and was up from $818.0 mln, or 92 cents per share, a year ago. Revenue rose to $7.46 bln from $5.41 bln.
Analysts, on average, expected $1.08 per share on revenue of $7.37 bln. Apple itself had projected $1 per share.
Addressing concerns that Chief Executive Steve Jobs's health may have suffered in recent months, Oppenheimer said on a conference call that Jobs has no plans to leave Apple and his health was a private matter. The CEO had successful pancreatic cancer surgery about four years ago but looked thin at a recent conference, when Apple said he was fighting a "common bug."