Apple earnings surge 118% in first fiscal quarter

Apple earnings surge 118% in first fiscal quarter


Apple Inc. reported record quarterly sales and profit, as holiday purchases of the new iPhone helped the company steer clear of the consumer spending slump that has hurt rival technology companies.

Fiscal first-quarter profit more than doubled to $13.1 billion, or $13.87 a share, compared with $6 billion, or $6.43 a share, a year earlier, Apple said today in a statement. Sales rose 73 percent to $46.3 billion. Analysts surveyed by Bloomberg on average estimated profit of $10.14 a share on sales of $39 billion.

Apple sold 37 million iPhones, up from the previous record of 20.34 million. Customers snapped up the 4S model that went on sale in October, a week after the death of co-founder Steve Jobs. The results mark the first time the company’s quarterly revenue topped Hewlett-Packard Co.’s, underscoring how its focus on sleek touch-screen mobile devices has reshuffled leadership in the industry.

“It’s a milestone,” Brian White, an analyst at Ticonderoga Securities LLC, said of Apple surpassing Hewlett-Packard in sales. “There are so many growth drivers around this company.”

Cupertino, California-based Apple, in looking ahead to results for the second quarter, forecast revenue of about $32.5 billion and profit of $8.50 a share. That compares with average analysts’ predictions for sales of $31.9 billion and profit of $7.96 a share.

Apple shares, up 25 percent in the past 12 months, had closed at $420.41 in New York. They were halted before the report.

IPads Versus PCs
In the first quarter, which ended on Dec. 31, Apple sold 15.4 million iPads, topping the 13.5 million predicted by analysts. IPhone sales on average were predicted to reach 30.2 million.

“Apple’s momentum is incredibly strong, and we have some amazing new products in the pipeline,” Apple Chief Executive Officer Tim Cook said in the statement. The period was the first full quarter since Cook took over as CEO in August, when Jobs stepped down, six weeks before his death.

The results contrast with those of companies such as Microsoft Corp. and Intel Corp., which are grappling with slower personal-computer sales in part because customers are choosing to buy smartphones and tablets like the iPad instead. They are trying to catch up by rolling out new mobile products, including Microsoft’s Windows 8 operating system, designed to integrate more smoothly with smartphones and tablets.

Rival smartphone makers also have struggled to keep pace with Apple. HTC Corp. and Motorola Mobility Holdings Corp., two of the biggest companies whose devices run Google Inc.’s Android operating system, disappointed investors with results for their most recent quarters. Research In Motion Ltd., which has lost 90 percent of its market value since 2008, replaced its co-CEOs this week.

Apple’s ‘Own Tune’
Apple collects more than half of the profits in the mobile- phone market, according to Horace Dediu, a former Nokia analyst who now operates the Asymco industry-research website.

“They are dancing to their own tune,” said Brian Marshall, an analyst at ISI Group in San Francisco. “Everybody else is losing market share if they compete against Apple.”

Holiday iPhone demand helped Apple gain market share on manufacturers including Samsung Electronics Co. and HTC. In December, about 45 percent of U.S. shoppers who bought a smartphone in the previous three months said they purchased an iPhone, up from 25 percent in a study done two months earlier, according to Nielsen Co. Android phones were selected by 47 percent of buyers, down from 62 percent.

Competitors also haven’t been able to match the success of the iPad, with Apple controlling 62 percent of the tablet market in the third quarter, according to researcher IDC.

The popularity of the iPad and iPhone has also buoyed sales of Apple’s lineup of Mac computers. The company sold 5.2 million Macs in the first quarter, up from 4.9 million in the previous quarter.

Hewlett-Packard had revenue of $32.1 billion in its most recent quarter, which ended in October. The Palo Alto, California-based computer maker will report fiscal first-quarter results next month.

source: bloomberg.com