Apple's quarterly profit blew past Wall Street forecasts thanks to strong sales of Macs and iPhones and higher-than-expected gross margins, sending its shares up more than 3 per cent last night.
The company defied the global economic recession and reported a net profit of $1.23 billion, or $1.35 a share, for its fiscal third quarter ended June 27th, up from $1.07 billion, or $1.19 a share, in the year-ago period.
Earnings per share beat by far the average Street forecast of $1.18 according to Reuters Estimates, and topped even the most bullish “whisper” numbers of $1.30 to $1.35.
“The numbers are great. Their gross profits continue to surprise people and there is a return to product momentum ... a return to growth in the Mac business,” said Andy Hargreaves, an analyst at Pacific Crest Securities.
“And then the iPhone is doing tremendously well and that is a potent combination.”
Sales of Macs and iPhones both beat analysts' expectations, helped by product refreshes and lower prices, while iPod shipments were toward the low end of forecasts.
Apple said it sold 2.6 million Macs, up 4 per cent from a year ago, and 5.2 million iPhones in the June quarter, during which the company had launched its third-generation iPhone 3GS and cut the price on the second-generation model to $99.
The company said almost 20 per cent of Fortune 500 companies have bought at least 10,000 iPhones, and it is currently unable to make enough iPhone 3GSs to meet a demand - a problem Apple is working to address.
There had been some concern about margin pressure heading into the results, given the product price cuts and the trend of higher component costs.
But Apple posted a gross margin of 36.3 per cent, above the 34 per cent that some analysts had predicted. That compared with 36.4 per cent in the last quarter and 34.8 per cent a year ago. Cook forecast margins at 34 per cent in the September quarter.
“The overall takeaway is that Apple continues to execute in this tough environment,” said Kaufman Bros analyst Shaw Wu. “We think they are very uniquely positioned with their competitive advantages. They do the hardware, software and service, and
that really allows them to have a leg up against competitors.”
Reuters