Tuesday, January 24, 2012

iPhone sales drive record quarter for Apple

Apple reported record quarterly net profit and revenue on Tuesday in the first quarter since the death of founder Steve Jobs, driven by strong sales of the new iPhone.


Apple said its net profit more than doubled in the first quarter of fiscal 2012 to a record $13.06 billion while revenue rose to a record $46.33 billion from $26.74 billion a year ago.

Earnings per share of $13.87 blew past the $10.08 per share expected by Wall Street analysts.

Apple said it sold 37.04 million iPhones in the quarter which ended on December 31, up 128 percent from a year ago, and 15.43 million iPads, a 111 per cent increase.

The California-based gadget-maker sold 5.2 million Macintosh computers in the quarter, up 26 per cent, and 15.4 million iPods, a 21 per cent decline from a year ago.

"We're thrilled with our outstanding results and record-breaking sales of iPhones, iPads and Macs," Apple chief executive Tim Cook said in a statement.

"Apple's momentum is incredibly strong, and we have some amazing new products in the pipeline," Cook said.

Apple's previous quarterly highs for iPhone, iPad and Macintosh sales were 20.34 million, 15.43 million and 5.2 million respectively.

It was the company's first full quarter without its visionary co-founder and chief executive Steve Jobs, who died of cancer a day before the October 4 launch of the iPhone 4S.

The hot-selling iPhone 4S was the "fastest iPhone rollout" in the company's history, Cook said in a conference call with financial analysts.

"We made a very bold bet on demand" but the company was "still short" in some markets due to pent-up demand, he said.

"As it turned out we didn't bet high enough," said Cook, who took over as CEO from Jobs in August.

Growth in iPhone sales in the United States and Japan was "great," he said. "We could not be happier."

The fiscal 2012 first-quarter included a 14th week, the important holiday shopping week between Christmas and New Year's.

Investors applauded the blockbuster quarter, sending Apple shares up 7.5 percent to $452.00 in after-hours trading.

Apple said it ended the quarter with a cash pile of $97.6 billion, compared with $81.6 billion for the September quarter.

"We are actively discussing the best use of our cash balance," Peter Oppenheimer, Apple's chief financial officer, said in the conference call.

"We don't have anything to announce specifically today," he added.

Cook indicated the priority for iPhone expansion was China. "We have a ton more energy in the China market today," he said.

The iPhone was sort of a "catalyst" in spurring sales of other Apple products, much like the iPod's "halo" effect on the Macintosh in 2003-2004, he said.

The iPad, which runs on Apple's operating software, is benefiting from competition among other tablets, where "cannibalization" is clearly working in Apple's favor, Cook said.

"We're just going to innovate like crazy in this area," he said.

More than 55 million iPads have been sold since its launch in April 2010.

Apple's forecasts for the quarter leaped over Wall Street expectations: $32.5 billion in revenue and earnings of $8.50 per share. The market had penciled in $32 billion and $8.03, respectively.

Apple's iCloud, launched a few months ago, now has more than 85 million subscribers.

That was an "incredible" response from customers that marked a fundamental shift in recognition of the need to have numerous devices integrated online, Cook said.

He said iCloud is "not a product, it is a strategy for the next decade."