IPhone Sales Push Up Apple’s Profits

IPhone Sales Push Up Apple’s Profits

Exhibiting remarkable resilience in the eye of a swirling recession, Apple reported strong second-quarter profits on Wednesday that beat Wall Street’s expectations.

Apple Inc.The company, based in Cupertino, Calif., said respectable sales of iPods, iPhones and its newly refreshed line of Macs kept sales from dipping substantially during the typically slow post-holiday months. Apple reported that its net quarterly profit jumped to $1.21 billion, or $1.33 a share, up from $1.05 billion, or $1.16 a share, a year earlier.

Revenue increased to $8.16 billion, from $7.51 billion in the same quarter last year. Analysts had expected Apple to announce revenue of $7.9 billion and a profit of $1.09 a share, according to a survey conducted by Thomson Reuters.

Expectations about new products have pushed up Apple’s stock more than 40 percent over the last month. Apple watchers expect the company to introduce new iPhones at its Worldwide Developers Conference in June and perhaps a tablet device sometime later in the year.

The earnings news sent Apple’s stock up more than 3 percent in after-hours trading. The earnings report offered more proof that Apple’s strategy of selling must-have digital accoutrements at a premium price to people who can afford them is a smart, if counterintuitive, strategy for navigating the recession.

“Apple is a big company, but they are really addressing only the upper ends of their target markets, and those are arguably the parts of the market that are most resistant to the economic downturn,” said Shaw Wu, a senior research analyst at Kaufman Brothers.

Three months ago, Apple’s chief executive, Steven P. Jobs, said he was taking a leave of absence to address medical issues. Apple did not release any new information about Mr. Jobs in Wednesday’s earnings report. The company will hold its routine earnings call with analysts at 5:00 p.m. New York time.

As expected, sales of some of Apple’s products dropped slightly during the quarter. Apple said it sold 2.22 million Macs in the quarter that ended March 31, down from 2.3 million in the same quarter last year. Apple started selling new Macs, with more powerful processors, at the beginning of March.

The company said it sold 3.79 million iPhones, up from 1.7 million a year ago.

Projecting its earnings for the current quarter, Apple said it expected revenue of $7.7 billion to $7.9 billion and earnings of about $1a share. The company is usually cautious in the guidance it offers Wall Street.

THE NEW YORK TIMES