Apple Inc. AAPL-Q has blown past analyst expectations with record quarterly results.
The tech bellwether's Mac computer and iPhone sales – which generate more than half the company's revenue – both soared. Mac sales jumped 33 per cent to 3.36-million from 2.52-million in the same quarter a year ago. IPhone sales doubled to 8.74-million from 4.36-million. IPod sales dropped 8 per cent, however.
Apple posted $15.68-billion (U.S.) in sales during its 2010 fiscal first quarter, which covers the last three months of 2009. The company posted $3.38-billion in profit, or $3.67 a share, compared to $2.26-billion, or $2.50 a share in the same quarter last year.
According to multiple analyst surveys, Apple was expected to top its record earnings from the previous quarter, posting a profit of between $2.07 and $2.10 a share.
Apple, which has surpassed Wall Street expectations for earnings per share by at least 15 per cent in the past four quarters, adopted new accounting standards for its fiscal first quarter of 2010.
Apple forecast earnings for the current quarter of $11-billion to $11.4-billion on earnings of $2.06 to $2.18 a share.
The last fiscal quarter of 2009 was Apple's previous most profitable quarter, as the company earned $1.67-billion, or $1.82 per share. Mac computer sales in that period surged 17 per cent and iPhone sales jumped 7 per cent compared to the last quarter of 2008, while iPod sales dropped 8 per cent.
Analysts are especially bullish on Apple because of its role in the smart phone market. In the next two years, a surge of traditional cell phone users are expected to migrate to smart phones such as Research In Motion Inc.'s RIM-T Blackberrys, phones powered by Google Inc.'s GOOG-Q Android operating system and the iPhone.
“Longer term, Apple appears to be at the centre of the convergence of computing and communication devices, which means the good times for Apple might last for a very long time,” analysts at Hapoalim Securities wrote in a note before Apple's first quarter results.
“Despite significant hype, we believe the Street is underestimating the smart phone opportunity in general, and the opportunity for Apple in particular.”
The company's iPod sales may continue to slip compared to the same quarter in previous years – as more users migrate to iPhones and other multi-function devices. But in absolute terms, iPod sales tend to jump significantly during the last months of the year, thanks to the music-player's popularity as a holiday season gift.
Apple's earnings come at a time when the company is at the centre of media attention. It is widely believed the company will unveil a tablet computer on Wednesday – a device so closely guarded that Apple has yet even to confirm its existence. Although the tablet computer's pricing – if the device even exists – isn't known, some analysts are already predicting Apple will sell millions of units by the end of this year. Pricing estimates for the tablet range from $500 to about $1000.
“Despite high expectations, we believe Apple plans to redefine portable computing – as the Mac redefined the PC – by ‘creating' desire for a new converged portable device with innovative touch/gestures – with iTunes content,” RBC Capital Markets analyst Mike Abramsky said in a note. “A ‘Hit' could provide a possible new growth engine for Apple.”
With a report from Reuters
