APPLE REPORTED profit that almost doubled as rising demand for the iPhone, newly available from Verizon Wireless, outweighed lower-than-predicted sales of the iPad tablet.
Net income in the second quarter rose to $5.99 billion, or $6.40 a share, from $3.07 billion, or $3.33, a year earlier, Apple said in a statement yesterday.
Sales jumped 83 per cent to $24.7 billion. Analysts predicted profit of $5.39 a share on sales of $23.4 billion, the average of estimates compiled by Bloomberg. The iPhone went on sale from Verizon Wireless in February, helping Apple sell 18.7 million units, surpassing 16.3 million iPhones.
That allayed concern that Apple's results would be marred by supply shortages stemming from the March earthquake in Japan.
"This will restore in investors' minds that Apple is the magical growth story in tech," said Mark Moskowitz, an analyst at JPMorgan Chase.
"They really are amazing." Apple rose 3.2 per cent in extended trading to as high as $353.39 after the results were released. The shares had gained $4.55 to $342.41 at 4pm in Nasdaq trading.
"We will continue to innovate on all fronts throughout the remainder of the year," chief executive Steve Jobs said in the statement. Mr Jobs has been on medical leave since January, leaving day-to-day leadership to chief operating officer Tim Cook.
While sales of iPhones more than doubled, rising at the fastest pace in two years, Apple sold 4.69 million iPads, fewer than the 6.1 million units predicted. The company also forecast profit and sales below analysts' predictions. Profit this quarter will be $5.03 a share on sales of $23 billion, Apple said.
Analysts predicted that Apple would have profit of $5.25 a share on sales of $23.8 billion. "Where investors are more concerned is in Apple's guidance for the next couple of quarters and where potentially higher component costs could impact gross margins," said Mark Demos, a fund manager at Fifth Third Asset Management, which has about $18 billion under management, including Apple shares.
Demand for Apple's products "is going to be fine", he said. Apple typically reports profit that exceeds analysts' predictions. Apple has beaten the average estimate for its earnings per share for at least 28 consecutive quarters. - (Bloomberg)
