Apple releases record earnings
By Hayley Tsukayama,
Apple blew away already-high expectations with its first-quarter earnings results, buoyed by strong sales of the iPhone 4S and the iPad 2. In the first full fiscal quarter the company faced without its late co-founder, Steve Jobs, Apple posted a quarterly revenue of $46.33 billion and announced it had sold 37 million iPhones and 15 million iPads. Analysts had predicted iPhone sales of around 30 million and iPad sales at a more conservative 13 million.
The company said that this holiday season carried the company to its highest ever numbers for quarterly revenue and earnings. Sales of iPads were up 111 percent over the same period last year; sales of iPhones were up 128 percent over the previous year. Mac sales were also strong, up 26 percent over the previous year with 5.2 million sold. The only product whose numbers fell, as expected, was the iPod, sales of which decreased 21 percent to 15.4 million units — even with the debut of a revamped iPod Touch model.
On an earnings call with investors, Apple executive Peter Oppenheimer said that the company also saw strong sales overseas and in its retail stores, which generated $6.1 billion in revenue. He also said that Apple is actively looking for uses for its $97.6 billion in cash and that the company is not letting that money “burn a hole in our pockets.” He said the company had nothing to announce on that front, but would do so in the future.
Apple chief executive Tim Cook said that while the iPhone 4S led sales, the company was right to diversify the number of models of the phone available, a reference to the company’s decision to price the iPhone 4 at $99 and make the iPhone 3GS free, on contract. He also noted that the company’s strong retail sales in mainland China were not included in this quarter’s report.
Asked about the Apple TV and the rumored iTV, Cook said that Apple TV has been improved but is still “a hobby” and that he had nothing to announce on that front.
In a release from the company, Cook — as usual — hinted that the company has some “amazing new products in the pipeline.”
Apple is known for providing conservative guidance, but apparently confident that its momentum would continue, the company predicted about $32.5 billion in revenue and earnings per share of $8.50.
Addressing a question about low-priced competitor tablets, Cook said that Apple is prepared for tablets to take over market share from desktop PCs. He added that “the ecosystem for iPad is in a class by itself” and that its App Store far outstrips the competition.
“We don’t see these limited function tablets and e-readers as being in the same category,” he said, saying that he didn’t believe customers would “settle” for competitors’ models. “We'll just continue to innovate like crazy in this area and we think we’ll be able to compete” with current and future tablet competitors, he said.
Apple stock spiked in after-hours trading on the news, up to just over $450 per share during Apple’s call.