Shares of Apple Inc. slipped below $400 (U.S.) Wednesday as analysts cut their price targets on the tech giant’s stock after it posted its first year-over-year drop in profit in about 10 years, but later climbed back above that mark.
Apple’s profit slipped in the second quarter to $9.5-billion (U.S.) or $10.09 a share from $11.6-billion or $12.30 a year earlier.
Revenue, though, climbed to $43.6-billion from $39.2-billion.
The company also hiked its quarterly dividend by 15 per cent to $3.05 and boosted the amount of its stock buyback to as much as $60-billion.
Apple shares are down by more than 40 per cent since its peak of more than $700 last September.
Yesterday's results sparked a rash of cuts among analysts in their outlook for the shares.
Nomura, for example, cut its price target to $420 from $490, while, at the higher end, CanaccordGenuity trimmed its target to $560 from $600.
"Consistent with our global wireless surveys indicating seasonally softer iPhone 5 sales combined with a stronger mix of legacy iPhone 4S/4 sales, Apple reported March quarter results in line with our estimates and slightly ahead of consensus," said CanaccordGenuity analyst T. Michael Walkley.
"However, June quarter revenue and margin guidance failed to meet even our below-consensus estimates, as refreshes of key iPhone and iPad products are not expected to occur until the fall."
He believes, however, that new product launches in the second half of the year will boost year-over-year profit again.