Apple earnings up by 50 per cent
Apple reported the most profitable quarter in its history, with strong sales of iPhones and Mac computers helping to lift earnings by 50 per cent over a year ago.
Revenue also hit a record high, rising 32 per cent and beating its previous quarterly record by more than $3 billion. The results were boosted by a move to adopt new accounting standards for iPhone and Apple TV sales.
Steve Jobs, chief executive, hailed the results and hinted at the launch of the group’s new tablet computer on Wednesday. “If you annualise our quarterly revenue, it’s surprising Apple is now a $50 plus billion company. 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.”
Apple reported profits of $3.38 billion (£2.1 billion), or $3.67 a share, in the quarter to December 26, up from $2.26 billion, or $2.50 cents a share, in the same period a year ago, when Apple was using the old accounting standard. Revenue rose to $15.68 billion from $11.9 billion. International sales accounted for 58 per cent of the quarter’s revenue.
The results underline Apple’s status as the most profitable consumer technology company in the world.
The growth was driven by sales of Macs and iPhones as consumers returned to spending. Apple sold 3.36 million Mac computers in the quarter, a 33 per cent unit increase on the previous year, and 8.7 million iPhones for 100 per cent growth, though that was slightly below some analysts’ expectations. The iPhone is now distributed in more than 85 countries as the company has rolled it out in international markets including China and South Korea.
Apple sold 21 million iPods in the quarter, representing an 8 per cent decline on the year before.
Peter Oppenheimer, Apple’s chief financial officer, said: “We are very pleased to have generated $5.8 billion in cash during the quarter.
“Looking ahead to the second fiscal quarter of 2010, we expect revenue in the range of about $11.0 billion to $11.4 billion and we expect diluted earnings per share in the range of about $2.06 to $2.18.”
Analysts had been predicting profit of $1.77 per share and revenue of $10.4 billion in the current quarter, according to Thomson Reuters.
The results showed Apple was able to sell premium-priced products despite a squeeze on people’s wallets, analysts said.
Bill Kreher, analyst with Edward Jones, added: “Mac sales were very strong, which more than offset what might be perceived as a ho-hum iPhone number. I think overall there’s a lot of potential catalysts as we head into 2010, whether it’s the forthcoming tablet or the iPhone’s migration to new carriers.”
Apple executives declined to be drawn on Wednesday’s expected launch of the tablet computer, saying only: “Stay tuned.”
Analysts are expecting the new device — said to be halfway between an iPod Touch and a MacBook computer — to sell about 2 million units in the first year. However, some have warned that it might cannibalise sales of iPhones and Apple laptops.
Shares in Apple, based in Cupertino, California, closed up 2.69 per cent at $203.08 on Nasdaq. Apple shares peaked above the $215 mark last week — a record high for the stock, which has already more than doubled over the past year.
The new accounting principles have resulted in the company’s recognition of substantially all of the revenue and product costs for iPhone and Apple TV sales when those products are delivered to customers, rather than deferring them over a period of 24 months.