Apple has most profitable quarter ever over the holidays, fuelled by iPhone

The Associated Press ~ staff The News
Send to a friend

Send this article to a friend.

SAN FRANCISCO - Apple Inc. rocketed to its most profitable quarter ever over the holidays, as huge sales of the iPhone and Macintosh computers led to a nearly 50 per cent jump in net income.
The company offered no clues about what it plans to unveil Wednesday in San Francisco, although analysts expect the new product to be a tablet-style computer. CEO Steve Jobs indicated that investors should expect a significant event.
"The new products we are planning to release this year are very strong, starting this week with a major new product that we're really excited about," Jobs said in a statement.
Apple also offered a profit and revenue forecast above Wall Street forecasts.
The iPhone's rollout in several major new markets, including China and South Korea, helped Apple double sales of the hot phone.
Apple's numbers also got a boost from an accounting change. Apple started putting iPhone revenue and profit on its books when the gadget is sold, rather than deferring those results over the presumed life of the device.
Apple said Monday it earned $3.4 billion, or $3.67 per share, in the latest quarter, which ended Dec. 26. In the same period of 2008, had the same accounting standards been in place, it would have had net income of $2.3 billion, or $2.50 per share.
Revenue was $15.7 billion, a 32 per cent jump from $11.9 billion in the same period last year. Apple's chief financial officer, Peter Oppenheimer, said on a conference call that half of the company's revenue growth could be attributed to the accounting change, but Apple was silent on the change's effects on net income.
Apple's report reflected the company's ability to allure shoppers without deep cuts to its premium prices. Apple's reputation as a luxury brand hasn't dented its ability to put up better numbers even as many computer buyers gravitate toward cheaper options.
Apple sold 8.7 million iPhones in the quarter, double what it sold in the same period the year before. And its sales of Macintosh computers rose 33 per cent.
But the 21 million iPods it sold marked an 8 per cent decline. Although Apple refreshed its iPod Nano with new colours and a video camera last fall, sales of the iPod have suffered as the iPhone, which has iPod features built in, has grown in popularity.
Shaw Wu, an analyst for Kaufman Bros., was expecting Apple to sell about 800,000 more iPhones in the quarter. He attributed the lower number to possible component shortages.
Apple didn't tell Wall Street analysts in advance that it would make the accounting switch in the first quarter. That may have left some investors scratching their heads when the numbers landed. In extended trading, the shares edged up less than one per cent, after gaining $5.32, 2.7 per cent, to end the regular session at $203.07.
Wu said that until he goes back to re-crunch the numbers, he is basing his opinion on the number of iPhones, Macs and iPods Apple sold in the quarter, and on the nearly $6 billion increase in Apple's cash stockpile.
"That number looked pretty solid," Wu said.
Apple said it expects the current quarter, the second in its fiscal year, to yield earnings of $2.06 to $2.18 per share, with revenue of $11.0 billion to $11.4 billion.
Analysts did not factor the accounting change into their estimates for the current quarter. On average, they had been predicting profit of $1.77 per share and revenue of $10.4 billion in the current quarter, according to Thomson Reuters.

Organizations: Apple Inc., Kaufman Bros.

Geographic location: SAN FRANCISCO, China, South Korea

  • 1
  • 2
  • 3
  • 4
  • 5

Thanks for voting!

Top of page

Comments

Comments