Apple shares down

Updated at 7:17 am on 25 January 2013

Despite record quarterly revenue results, Apple shares fell on Wednesday after announcing that iPhone sales lower than expected.

Revenue rose 17.7% to $US54.5 billion in the three months to December, compared with $US46.3 billion for the same period in 2011.

Profit was flat at $US13.1 billion, with goss margin narrowing to 38.6%, from 44.7% in 2011.

Despite Apple selling a record 47.8 million iPhones in the quarter, compared with 37 million, the number was not enough to meet the expectations of investors and its shares slid 7.7%.

Last week, Apple shares fell below $US500 for the first time in 11 months on worries that sales of the latest iPhone were falling.

Kenneth Polcari at O'Neil Securities said Apple needs a new product and Apple TV is the best one on the horizon.

Investors also want to know what Apple is going to do with the mountain of cash it's sitting on.

Mr Polcari said the company has a massive balance sheet and it made no announcement about putting that cash to work.

"I think a lot of investors over here we're starting to wonder if they're going to put that to work on a stock repurchase plan which ultimately would in the long run you know help the company, help earnings per share and help stabilise the stock."

Mr Polcari said investors are likely to be disappointed there was no announcement.

Next story in Business: Investors paying too much for shares - Tower