Apple Earnings Rise 50% on Holiday Demand for Macs

Apple Earnings Rise 50% on Holiday Demand for Macs

Jan. 25 (Bloomberg) -- Apple Inc. reported a 50 percent jump in first-quarter profit, buoyed by holiday orders for the Macintosh computer. Sales of the iPhone missed some analysts’ estimates.

Net income rose to $3.38 billion, or $3.67 a share, from $2.26 billion, or $2.50, a year earlier, Apple said today in a statement. Sales increased to $15.7 billion. The company said it changed the way it accounts for iPhone sales, which means the figures aren’t comparable to analysts’ estimates.

Chief Executive Officer Steve Jobs added iMac desktops in October to spur holiday demand and started selling the iPhone in China, the world’s biggest mobile-phone market. Apple said it sold 8.7 million iPhones and 3.36 million Macs in the quarter. Gene Munster, an analyst with Piper Jaffray & Co. in Minneapolis, said investors were looking for almost 8.8 million iPhones and 3.1 million to 3.2 million Macs.

“The Mac number looked good and was impressive,” said Shaw Wu, an analyst at Kaufman Bros. in San Francisco. “IPhone shipments were light.” Some investors were looking for as many as 10 million, he said.

Sales this quarter will be $11 billion to $11.4 billion and profit will be $2.06 to $2.18 a share, Apple said.

Apple, based in Cupertino, California, rose $5.33 to $203.08 today in Nasdaq Stock Market trading. The shares were halted in extended trading.

Tablet Computer

“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,” Jobs said in the statement.

Apple also said it sold 21 million iPod media players. That includes the redesigned iPod Nano, a device that has a video camera and was unveiled by Jobs in September. Munster estimated Apple would sell 20.1 million iPods.

Apple has been recording sales of the iPhone using a subscription-accounting approach, spreading out sales over a 24 month period. In September, the Financial Accounting Standards Board approved a change in rules that lets companies record revenue earlier from products that combine software and hardware, such as the iPhone.

Tablet Anticipation

Apple will follow today’s earnings report with a product event on Jan. 27. The company plans to unveil a tablet computer, a person familiar with the matter said earlier this month. Analysts have speculated for at least a year that Apple is working on a version of its iPod Touch with a larger screen, which would let people watch movies, play music, read books and surf the Internet.

Such a device should capitalize on customer interest and developer enthusiasm for the iPhone and iPod Touch, said Barry Jaruzelski, a partner with Booz & Co. in New York. Apple has sold more than 50 million iPhones and Touch players, and more than 125,000 developers have created at least 100,000 applications for the devices.

Anticipation for the tablet has helped lift Apple’s stock, which closed at a record of $215.04 on Jan. 19, the day after the company sent out invitations to the event.

The holiday shopping season has been Apple’s biggest sales quarter for the past four years, and the iPhone and Mac together accounted for more than 60 percent of revenue in the period ended in September.

Munster had estimated Apple would sell 9.3 million iPhones and 3.1 million Macs.

Apple was the No. 5 personal-computer marker in the U.S. in the fourth quarter of 2009, according to research firm IDC in Framingham, Massachusetts. The company’s market share rose to 7.4 percent from 7 percent a year earlier, IDC said.

The iPhone 3G S was the No. 2 smartphone in the U.S. in the third quarter, behind Research In Motion Ltd.’s BlackBerry Curve, according to NPD Group Inc. in Port Washington, New York.

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