Apple earnings have soared up for the period that ended in September this year. The announcement of Apple earnings suggests that the company has earned the highest ever revenue and profit. The surge in Apple’s earnings marks the company’s competence in mobile devices. Sales are roaring across virtually all its product lines, from smartphones to the new iPad tablet. As a result, Apple saw its share price also rise above $300 per share last week for the first time.
Surging revenues from the iPhone are a major factor that pushed Apple’s quarterly revenue above $20 billion for the first time, and its profit to $4.3 billion. While commenting about Apple earnings and the role the iPad played in pushing up the earnings, the CEO of Apple, Steve JobsSteve Jobs said, “The more time that passes the more I am convinced that we’ve got a tiger by the tail here. We sold 14.1 million iPhones in the quarter, we’ve now passed RIM [and its Blackberry], and I don’t see them catching up with us for the foreseeable future.”
However, sales of the iPad fell short of analysts’ projections for the period. That, along with compressed gross margins, pushed the stock down more than 5% in after-hours trading Monday after closing up 1% at $318 in the regular session — setting a new high. “The iPad as a driver of growth has yet to play out, and they were able to blow past earnings estimates without it this quarter,” said Rajesh Ghai of ThinkEquity in an interview. He added that international markets “are going to be a bigger driver of growth” than previously expected.
For the quarter, Apple reported net income of $4.31 billion, or $4.64 per share, compared with net income of $2.53 billion or $2.77 per share for the same period the previous year. Revenue jumped 67% to $20.34 billion. Analysts were expecting earnings of $4.10 per share on revenue of $18.9 billion, according to consensus estimates from FactSet Research.
The main driver of the quarter was the iPhone, which sold 14.1 million units for the quarter — nearly double from the same period last year and far more than Wall Street’s consensus estimate of 11.5 million units. It was the first full period of results to include the iPhone 4, which hit the market in late June. Apple also said it sold nearly 4.2 million iPads; analysts were expecting about 4.8 million iPads to be sold for the quarter. About 3.27 million iPads were sold during the June quarter — the first period for which the device was available.
In the wake of the announcement of Apple earnings, many market and financial analysts believe that the share price of Apple may have hit the highest point in history, but it is not unreasonable. “It’s an incredible phenomenon. … They’ve blown past forecasts, and it’s primarily driven by the iPhone,” Colin Gillis of BGC told Reuters. Stock analysts have recently revised up their forecasts for Apple’s earnings next year, to roughly $18 per share, according to information gathered by the Yahoo! Finance website. Apple’s success leaves it with the kind of problem most companies dream of: figuring out what to do with excess cash. Jobs said the company is eyeing the possibility of one or more “strategic opportunities” such as acquisitions.
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