Apple expects gross profit margin to fall to 32% in the current quarter, due to higher expenses related to stock-based compensation, slower software sales and lower sequential revenue, company chief financial officer Peter Oppenheimer told a conference call Wednesday.

Analysts have guided second quarter earnings of $1.09 per share and $5.14 at fiscal year 2008 and estimated revenues of $6.98 billion in the quarter and $31.82 billion for fiscal 2008.

Apple is building its future earnings growth on new prducts, including online film rentals for iTunes users and the world''s thinnest laptop Mac Book Air, as well as Mac Pro.

“We''re thrilled to report our best quarter ever, with the highest revenue and earnings in Apple''s history,'' said Steve Jobs, Apple''s chief executive.

Share Price Review

Apple Inc’s shares took a battering after the lukewarm earnings forecast. The stock plunged $25.38 or 16.31% to $130.26 in mid-morning trade Wednesday. Over the past 52 weeks, the share has traded in the range $82.86 to $202.96.


2:00PM New York, 7:00PM London - U.K economy growth slowed in the fourth quarter on a slowdown in services and retails sales.

Stocks in U.K. plummeted as economy expanded at slower pace in the fourth quarter ending in December 2007 at 0.6%, lower than 0.7% growth in the third quarter.

In London trading, FTSE100 dropped 2.28% or 130.80 to 5,609.3. Of the 102 FTSE 100 stocks 27 gained, 74 declined, and one was unchanged.

Alliance & Leicester led advancing stocks with a rise of 5.96% on reports that the government plans to rescue depositors funds in Northern Rock through a private sell of the mortgage lender.

Other financial stocks gained on the news. Standard Chartered Bank Plc climbed 3.06%, HSBC Holdings Plc gained 3.04%, and Barclays Bank edged up 1.63%.

The Office of National Statistics reported on its Web site today that GDP increased 0.6% in the three months to December 2007 compared to a 0.7% jump recorded in the third quarter as the total increase in total production output was trimmed by weaker growth in services.

Economy grew at 3.1% in 2007.

Total production output in the fourth quarter surged 0.3% from no growth in the three months to September buoyed by a strong output growth in mining which advanced at 1.1% compared to a 1.1% decline a year ago in the same period.

However, manufacturing growth output was unchanged from the third quarter, while electricity, gas and water edged higher from 0.8% in the quarter to September to 1.7% in the quarter ended December.

According to the statistics office, total service output tumbled from 0.8% to 0.7% in the quarter under review due to weaker growth in business service and finance, which plunged 0.4% in the fourth quarter from 1.3% as growth slowed in computing services and financial intermediation.

The largest growth in total service output was in transport, storage and communication rising 1.9% in the fourth quarter compared to 0.5% the previous month.

Distribution, hotels and restaurants jumped 1.0% from 0.8% in the third quarter with wholesale making the largest contribution while retailing declined.

Construction growth also fell to 0.7% from 0.8% in the third quarter, while agriculture spiked 1.3% in the quarter to December from 0.6% from a quarter earlier.

The Bank of England said today on its Web site the long-term inflation expectations have remained broadly stable, adding that upside risks to inflation from supply side developments had increased because of changes in food, energy prices and the exchange rate.