Apple Quarter Results Strong on iPhone Sales

By Reuters  |  Posted 2010-04-21 Email Print this article Print
 
 
 
 
 
 
 

WEBINAR: On-demand webcast

Take Advantage of Cloud Backup to Kick-Start Your Disaster Recovery REGISTER >

Apple's March quarter numbers beat Wall Street's expectations on strong iPhone sales. Executives also said that iPad sales have exceeded the company's own expectations.

(Reuters) - Apple Inc's results blew past Wall Street expectations on the back of record iPhone sales, and the company gave a strong revenue forecast, sending its shares up more than 5 percent to an all-time high.

The results and forecast should boost Apple's stock price, which has charged upward for more than a year amid the hype surrounding the launch of the iPad tablet.

Apple, which typically offers conservative forecasts, projected revenue of $13 billion to $13.4 billion in the June quarter. Wall Street had forecast revenue of $12.97 billion.

The company sold 8.75 million iPhones in the March quarter -- more than double the figure of a year ago and way above estimates -- driven by strong, broad-based, international demand for the smartphone, some of it due to the addition of new carriers in key overseas markets.

Apple's stock has climbed about 15 percent this year and struck a record high on Friday. In after-hours trade on Tuesday, it surged more than 5 percent to $257.30 from a regular-session close of $244.59.

"I don't think investors were braced for the kind of outside beat that we've gotten this afternoon," said Oppenheimer analyst Yair Reiner.

"All indications are that Apple's momentum in the marketplace is continuing to accelerate."

Apple is betting big on the iPad as the company's next big breakout product. The device went on sale earlier this month and sold half a million units in the first week.

IPad sales have exceeded Apple's expectations, Chief Operating Officer Tim Cook said on a conference call with analysts.

"We think the market size for the iPad is very large, and we want to capitalize on our first mover advantage," Cook said.

Apple forecast gross margins for the current quarter to fall to 36 percent, down from a better-than-expected 41.7 percent in the March period and below analysts' target of 40 percent. That is partly due to the iPad. The company declined to say what the iPad's margins are.

BLOW-OUT QUARTER

Few analysts were expecting Apple to crush Wall Street's numbers so jarringly. Some expected Apple's shares to sell off after the report as investors took profits following another solid report.

The highest revenue estimate among analysts polled Thomson Reuters I/B/E/S fell $900 million short of Apple's total, while the top earnings-per-share estimate undershot by 61 cents.

"It was phenomenal," said Daniel Ernst, an analyst with Hudson Square Research.

"How can anyone say they are highly valued? I would argue that the stock is inexpensive on a growth metric."

The company on Tuesday reported net income of $3.07 billion, or $3.33 a share, in the fiscal second quarter ended March 27, up from $1.62 billion, or $1.79 a share, in the year-ago period.

Analysts on average were expecting a profit of $2.45 a share, according to Thomson Reuters I/B/E/S.

Revenue rose nearly 50 percent to $13.5 billion, well above Wall Street's estimate of $12.04 billion.

Sales of higher-priced Macintosh personal computers, a source of revenue strength in the previous quarter, leapt 33 percent to 2.94 million units, just ahead of analysts' targets.

The company also sold a better-than-expected 10.89 million iPods in the quarter.

Apple's strength lay in international markets, which accounted for 58 percent of its sales in the quarter.

Revenue in Europe surged 63 percent, rose 51 percent in Japan, and nearly tripled in Asia Pacific.

"All the upside was driven by iPhones," said Broadpoint AmTech analyst Brian Marshall. "The international carrier partner program really ramped up this last quarter."

Shares of Cupertino, California-based Apple touched an all-time high of $251.14 on Friday.

(Reporting by Gabriel Madway and Edwin Chan; Editing by Richard Chang and Robert MacMillan)

 

 
 
 
 
 
 
 
 
 
























 
 
 
 
 
 

Submit a Comment

Loading Comments...
























 
 
 
 
 
 
 
 
 
Thanks for your registration, follow us on our social networks to keep up-to-date