Why Wall Street is not happy with Apple's 38 percent jump in profit

Wall Street investors are not impressed by Apple's double-digit growth. Are they being too tough? 

Apple reported a double-digit quarterly profit on Tuesday, but Wall Street is not satisfied.

Apple’s profit increased 38 percent to $10.7 billion compared to last year, and its revenue surged 33 percent to $49.6 billion, the company announced on Tuesday.

“In the third quarter our year-over-year growth rate accelerated from the first half of fiscal 2015, with revenue up 33 percent and earnings per share up 45 percent,” Apple’s CFO Luca Maestri explained. “We generated very strong operating cash flow of $15 billion, and we returned over $13 billion to shareholders through our capital return program.”

“We had an amazing quarter, with iPhone revenue up 59 percent over last year, strong sales of Mac, all-time record revenue from services, driven by the App Store, and a great start for Apple Watch,” said Tim Cook, Apple’s CEO in a statement.

Apple may characterize its growth as "amazing," but the surge does not seem to impress Wall Street. In spite of Apple’s increase in revenue, analysts and investors expressed despair. The Wall Street Journal wrote  “Apple iPhone Sales, Up 35%, Disappoint Investors,” while The New York Times headline read “Apple Profit Up 38%, but iPhone Sales Disappoint Wall Street.”

As soon as the report was out, investors' discontent showed its impact on the market.

In about three minutes after the report was released, Apple’s share price fell by 8.3 percent, costing the company $62 billion, Quartez reported.

The sudden fall stems from high expectations for Apple. The company forecast revenue of $49 billion to $51 billion, missing analysts' average estimate of $51.13 billion, according to a consensus estimate from Thomson Reuters.

The company sold 47.5 million iPhones in the third quarter, which represents an increase of 35 percent, but again, as Reuters says, some analysts had expected sales of closer to 49 million.

"To a degree, there are unrealistic expectations from the outside," Gartner analyst Van Baker told USA Today. "It is increasingly difficult for Apple to surprise," which could lead to similar problems for the company in coming quarters, Baker says.

Another area that could portend badly for future quarters for the company is the question of sales of Apple Watch. The company did not disclose shipments of the new product and, as USA Today wrote, "the mystery remains over Apple Watch." Maestri said sales of the Apple Watch beat the company's expectations, yet suspicions remain that demand for the watch could be weak, raising questions as to whether Apple, leaning heavily on the fabulous success of its iPhone, has become "a one-trick pony."

Toni Sacconaghi, a financial analyst for Sanford C. Bernstein also told The New York Times that Apple’s growth is “mind-boggling,” but that “everyone expected that and a little bit more."

Apple, the world's largest company, continues to grow no matter what, but it seems like a tough journey for the company, which answers to extremely demanding investors. “Even when Apple jumps," writes The New York Times, "investors wonder why the company can’t jump a bit higher.”