Apple Cuts Annual Spending Forecast By $1 Billion

Apple Inc. on Wednesday cut its capital-spending projection for this fiscal year by 8%, reducing what it plans to spend on purchasing manufacturing equipment, building data centers and retail stores.

Apple now expects to shell out $12 billion on capital expenditures for the year ending in September, according to a regulatory filing for the fiscal third quarter. In April, Apple had projected $13 billion in capital spending--reiterating its forecast from the beginning of the year.

A company spokeswoman said Apple lowered the forecast because it was able to spend more efficiently for tooling equipment and facilities. "There are no changes in our product plans," she said.

Apple pays for specialized manufacturing equipment and then leases the tools to its suppliers producing Apple products.

The revised projection comes a day after Apple reported its profit rose 38% for the fiscal third quarter, though it fell short of expectations for iPhone sales. Apple's shares dropped 4.2% to $125.22 on Wednesday.

When Apple announced its initial spending plans in October, Apple said it planned to allocate $12.4 billion for manufacturing equipment, data centers, corporate facilities and infrastructure. The remaining $600 million, Apple said, was earmarked for retail store facilities including the opening of 25 stores and remodeling of five existing stores.

Apple's capital spending can fluctuate based on the timing of new products or the business conditions of partner companies. Apple didn't break down its spending plans in its latest filing.

Last fiscal year, the company projected $11 billion in spending for the year and met that estimate. The previous year, Apple spent $7 billion in capital expenditure after projecting that it would spend $10 billion.

The company has spent significantly more money in recent years, building out a large footprint of data centers across the world to power its services such as the App Store and iTunes. It is also building a new corporate headquarters near its current offices in Cupertino, Calif.

In retail, the company is expanding the number of stores it operates in China. It plans to have 40 stores in China by the middle of next year, compared with 22 stores currently.