Apple 2Q Earnings Blowout Wall Street

Apple 2Q earnings beat Wall Street predictions, but company shares fell $1.68 amid investor concerns relating to slower domestic consumer spending.

Apple Inc.'s second quarter was another surprise, with results that easily surpassed Wall Street's expectations, but it wasn't enough for investors to warm up to the company's stock any further.

Results came out after the market closed and Apple shares fell $1.68, about 1 percent, to $161.21 at the open of trade Thursday.

While Apple's sales jumped 43 percent and profits rose 36 percent, higher than analyst estimates, lower-than-expected guidance for the third quarter held the stock down.

Apple shares are trading well below their 52-week high of $202.96 set in December. Worried that economic distress is pinching consumers' ability to pay for Apple's premium-priced products, investors lopped off 40 percent from the stock's value in January and February, though it has rebounded considerably since then.

Apple is considered especially vulnerable to slower domestic consumer spending due to its stronger presence in the U.S. than overseas, and because its computers and gadgets typically carry higher price tags than competing products.

Investors decided that they still need to take a cautious approach toward a company known for its conservative guidance but also heavily weighted toward the U.S. market, which is rife with turbulence stemming from the crisis in the credit and housing markets.

"The stock was all over the place, but I thought it was a great quarter," said Jane Snorek, senior technology stocks analyst at First American Funds.

Investors were worried that Apple's gross profit margin — a key measure of how well a company controls manufacturing costs and pricing — came in below what many on Wall Street were expecting, despite Apple beating the net income estimate.

Apple's gross profit margin was 32.9 percent of revenues, better than the company's guidance but below the 35.1 percent in the year-ago period.

Investors were also concerned because Apple's third-quarter profit guidance of $1 per share is below the $1.10 per share that analysts surveyed by Thomson Financial were expecting. The expected sales of $7.2 billion, however, would be slightly higher than Wall Street's average forecast of $7.16 billion.

The company earned $1.05 billion, or $1.16 per share, in its second quarter, which ended March 29. That's 9 cents per share better than the average analyst estimate.

During the same period last year, Apple earned $770 million, or 87 cents per share.

Revenue jumped to $7.51 billion, better than the $6.96 billion analysts were expecting.