FILE -In this Saturday, Oct. 20, 2012, file photo, employees cheer customers as they enter a newly-opened Apple Store in Wangfujing shopping district in Beijing. Apple missed Wall Street earnings expectations for the second straight quarter, as iPad sales fell short of analyst forecasts.The slowdown in the growth of iPad sales was not unexpected, as the rumour mill correctly predicted that Apple would launch a smaller, cheaper iPad. It announced that device, the iPad Mini, on Tuesday, Oct. 23. (AP Photo/Andy Wong, File)
NEW YORK (AP) -- Apple's stock fell below $600 on Friday for the first time in three months, after the consumer electronics behemoth warned that costs of making new products will cut into profits in the holiday quarter.
Apple's earnings for the latest quarter also missed expectations.
Apple shares were down $11.26, or 1.9 percent, to $598.28 in afternoon trading.
Late Thursday, Apple said profits for the rest of the year would fall from last year because it's launching so many new products. It's expecting mammoth sales, but new products are more expensive to make than older ones.
Apple launched the iPhone 5 a month ago and announced two new iPads and three new Macs this week. In addition, it's shipping new iPods.
Wall Street analysts took the adjustment in stride, knowing that Apple nearly always lowballs its estimates, but several cut their earnings estimates for the fiscal year that started this month. Stuart Jeffrey noted that Apple's profit margins should be back to normal in the quarter that starts in April, but that will be too late to fully make up for the earnings hit in the holiday quarter. He cut his earnings estimate for the year by 10 percent and his price target on the shares from $710 to $660.
Apple shares have now lost more than $100 from their all-time peak of $705.07, hit on Sept. 21, the day the iPhone went on sale in the U.S. and eight other countries. That's a total loss to investors of $106 billion. Apple remains the most valuable public company in the world, by a wide margin, with a total market capitalization of $556 billion.
Apple's stock last fell below $600 following an earnings report as well. It missed expectations in the previous quarter, too, something rare for Apple.
The Cupertino, Calif., company started taking orders for the iPad Mini on Friday. The new, smaller version of the iPad tablet starts at $329. Initial shipments of the white model quickly sold out on Apple's site; buyers will now have to wait two weeks for delivery. The black model was still available Friday afternoon for a one-week delivery.