Apple shares down 9 percent on outlook

By Peter Henderson

SAN FRANCISCO (Reuters) - Apple said on Monday its current-quarter earnings would be well below Wall Street targets, sending shares in the maker of Macintosh computers and iPod music players down nearly 9 percent.

While Apple has a reputation for giving conservative financial forecasts, its view for the fiscal fourth quarter undercut analyst expectations to a deeper degree than in past quarters, prompting investors to seek more details.

But after reporting better-than-expected third-quarter results, Apple executives said they saw no effect from a weak U.S. economy and expected stronger Mac sales this quarter.

"It's a reaction to Apple's typical conservative guidance," Chris Whitmore of Deutsche Bank said of the share price drop. "Investors are likely to focus on the rationale for the conservative guidance."

Apple forecast fourth-quarter earnings of $1.00 per share and revenue of $7.8 billion (3.9 billion pounds), compared with average Wall Street targets of $1.25 per share -- out of a range of $1.13 to $1.41 -- on $8.3 billion in revenue, according to Reuters Estimates.

By comparison, in April, the company's forecast for third-quarter earnings per share was 11 cents behind Wall Street views at the time.

Then on Monday, third-quarter net income came in 11 cents ahead of the average estimate at $1.07 billion, or $1.19 per share, up from $818.0 million, or 92 cents per share, a year ago. Revenue advanced to $7.46 billion from $5.41 billion.

Analysts, on average, had expected a profit of $1.08 per share on revenue of $7.37 billion.