07/24/2012 06:17 EDT | Updated 09/23/2012 05:12 EDT

Apple shares fall as earnings disappoint

Shares of Apple. Inc. fell almost five per cent in after hours trading Tuesday after the company reported third-quarter net income that came in below Wall Street's expectations.

Apple earned $8.8 billion US, or $9.32 a share, on $35 billion in revenues. That was a 21 per cent increase in earnings from a year earlier and an increase in revenue of almost 23 per cent.

But analysts had expected profits of $9.8 billion, or $10.38 a share, on $37.35 billion in revenues.

After the announcement, Apple's shares were trading down more than $29 at under $572.

IPhone sales were below expectations of about 28 million at 26 million. The firm shipped 17 million iPads and four million iMacs, as expected.

The iPhone contributes to more than half of Apple's revenues, so even small changes can affect profits.

IPhone 5 expected in October

Analysts suspect many consumers are waiting for the launch of the iPhone 5, widely expected to be in October.

"They're going to make up for it, as all that pent-up demand that's sitting there will eventually come through," analyst Troy Crandall from MacDougall, MacDougall and MacTier told CBC News.

As well, Apple's average selling prices for both the iPhone and iPad declined to levels last seen in 2010 for the iPhone and the lowest levels ever in the case of the iPad.

Apple introduced a new iPad in March, but kept the older model in stores while cutting its price.

The average selling prices of Macs also fell.

Apple had net income of $7.3 billion, or $7.79 per share, in the same period last year.