Last updated: January 25, 2013 9:28 pm

Apple’s crown as most valued slips

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Apple lost the crown as the world’s most valuable company to ExxonMobil on Friday, capping a difficult week for the iPhone maker and its investors.

Shares in Apple gyrated throughout the day before closing down 2.3 per cent at $439.85, following a 12 per cent slump in value on Thursday. This left its market capitalisation at $413bn, or more than a third off its September highs.

At the same time, ExxonMobil closed up 0.42 per cent at $91.73, valuing the oil company at about $418bn.

Apple overtook ExxonMobil almost exactly a year ago, having briefly surpassed its market capitalisation in summer 2011.

On Wednesday, after the close of trading, Apple reported fiscal first-quarter results that failed to impress investors, as it guided to around a 20 per cent drop in earnings for the current quarter. Since then, Apple’s market capitalisation has shrunk by as much as $66bn.

Fears about Apple’s long-term growth prospects amid rising competition from Samsung and low-cost manufacturers such as Huawei and China Wireless’ Coolpad have led to its share price dropping from a high above $700 in September.

Apple’s shares are still up 239 per cent over the past five years albeit that they are presently trading at the same level they began 2012.

Over the five-year period, the share price of Amazon – whose Kindle Fire tablets rival the iPad – has eclipsed Apple’s, despite the vast difference in the profitability of the two companies.

In its first quarter, Apple reported $13.1bn in net income, almost three times more than the $4.5bn that Amazon has earned since it became profitable in 2003. While Amazon’s gross margin has ranged between 22 and 24 per cent over recent years, Apple investors have become used to gross margins of around 40 per cent or more.

Amazon was 3.8 per cent higher at just under $284 by close on Friday, valuing the company at $128.4bn, an increase of more than 60 per cent since the beginning of 2012.

However, Exxon has not had a great year: its 2012 results, out next Friday, are expected to show a 6 per cent drop in earnings per share.

The company has been hit by falling production and the slump in the price of North American natural gas, which followed Exxon’s $41bn acquisition of XTO a US gas producer, in 2010.

The oil group nevertheless has enormous financial strength; it is expected to have thrown off about $24bn in free cash flow after capital spending last year.

Exxon’s shares have risen by 5 per cent over the past 12 months.

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