SAN FRANCISCO: Apple Inc's results again smashed Wall Street's expectations after iPhone and Mac sales scaled new heights, offsetting disappointing sales of its iPad tablet computer.
Apple shares rallied about 4 percent on Wednesday, April 20.
The world's most valuable TECHNOLOGY [] corporation said a record 18.65 million units of the category-defining iPhone -- its flagship product -- moved in the March quarter, outpacing the 16 million or so expected.
It moved just 4.69 million iPads -- which command an 80 percent share of a burgeoning tablet market in which Motorola Inc and Samsung Electronics also compete -- but investors argued that would not detract from strong long-term demand.
The stellar results Wednesday came as concern is growing over how component supply constraints after Japan's earthquake and tsunami would squeeze margins and restrain iPhone and iPad sales in coming months.
Company executives said they were scrambling to meet "staggering" demand but were backlogged for now.
"Dynamite numbers across the board. The only hiccup is lower than expected iPad numbers," said Capital Advisors Growth Fund portfolio manager Channing Smith.
"We can attribute some of the weakness to stocking issues at some of the retail outlets and obviously the supply chain issue in Japan. Unfortunately, the supply chain issue will likely persist for the coming months but once we get past summer and the supply chain issues are resolved it's all systems go again for Apple."
Apple executives told analysts on a conference call they foresaw a hit to revenue this quarter of about $200 million -- less than 1 percent of projected global quarterly sales -- but expected no cost impact.
The company, known for its tight relationship with Asian suppliers, stands at the head of the queue for electronics components even if the supply crunch continues. Japan accounts for an estimated 6 percent of overall revenue.
IPAD SALES MISS TARGETS
The March quarterly report was Apple's first under the stewardship of Chief Operating Officer Tim Cook after Chief Executive Steve Jobs went on his third medical leave in January.
Cook, who is known as an operations and supply chain maven, said his boss -- who has undergone a liver transplant and survived a rare form of pancreatic cancer -- still played an active role in important decisions.
"He is still on medical leave but we do see him on a regular basis. He continues to be involved in major strategic decisions. I know he wants to be back full time as soon as he can," Cook told analysts.
Apple's iPad sales in the quarter fell well short of Wall Street's expectations: some analysts had projected shipments of closer to or even more than 6 million for the tablet computer launched on March 11.
But the lower-than-expected number could be attributed to the fact that Apple recognizes revenue from its stores when its customers receive the products. The initial wait time for the iPad 2 was four to five weeks.
"We sold every iPad 2 we could make and the demand was stunning," Apple Chief Financial Officer Peter Oppenheimer told Reuters in an interview.
Apple's results come as it prepares to build the next iPhone model with a faster processor, which will begin shipping in September, three people with direct knowledge of the company's supply chain said Wednesday.
It reported a net profit of $5.99 billion, or $6.40 a share, while revenue surged 83 percent to $24.67 billion. That surpassed expectations for $5.37 in earnings and $23.4 billion of revenue.
A large spike in sales of Mac computers, driven by the refreshed MacBook Pro, beefed up March-quarter earnings. Apple said it sold 3.76 million Macs, up 28 percent from a year ago.
It also sold 18.65 million of the high-margin iPhones, which is the technology company's most important product line.
Gross margins in the fiscal second quarter came to 41.4 percent, above Wall Street's average forecast of 39.03 percent.
Apple, which generally provides an ultra-conservative forecast, said it expected June quarter earnings of $5.03 a share on revenue of about $23 billion.
"IPad shipments were significantly lower than my estimates I think because of supply constraints," said Gabelli & Co analyst Hendi Susanto. "What impressed me was the gross margin."
Shares of Apple jumped 4 percent to $355.79 after hours, from a regular session close of $342.41. They had fallen about 3 percent since Japan's quake.
Apple shares rallied about 4 percent on Wednesday, April 20.
The world's most valuable TECHNOLOGY [] corporation said a record 18.65 million units of the category-defining iPhone -- its flagship product -- moved in the March quarter, outpacing the 16 million or so expected.
It moved just 4.69 million iPads -- which command an 80 percent share of a burgeoning tablet market in which Motorola Inc and Samsung Electronics also compete -- but investors argued that would not detract from strong long-term demand.
The stellar results Wednesday came as concern is growing over how component supply constraints after Japan's earthquake and tsunami would squeeze margins and restrain iPhone and iPad sales in coming months.
Company executives said they were scrambling to meet "staggering" demand but were backlogged for now.
"Dynamite numbers across the board. The only hiccup is lower than expected iPad numbers," said Capital Advisors Growth Fund portfolio manager Channing Smith.
"We can attribute some of the weakness to stocking issues at some of the retail outlets and obviously the supply chain issue in Japan. Unfortunately, the supply chain issue will likely persist for the coming months but once we get past summer and the supply chain issues are resolved it's all systems go again for Apple."
Apple executives told analysts on a conference call they foresaw a hit to revenue this quarter of about $200 million -- less than 1 percent of projected global quarterly sales -- but expected no cost impact.
The company, known for its tight relationship with Asian suppliers, stands at the head of the queue for electronics components even if the supply crunch continues. Japan accounts for an estimated 6 percent of overall revenue.
IPAD SALES MISS TARGETS
The March quarterly report was Apple's first under the stewardship of Chief Operating Officer Tim Cook after Chief Executive Steve Jobs went on his third medical leave in January.
Cook, who is known as an operations and supply chain maven, said his boss -- who has undergone a liver transplant and survived a rare form of pancreatic cancer -- still played an active role in important decisions.
"He is still on medical leave but we do see him on a regular basis. He continues to be involved in major strategic decisions. I know he wants to be back full time as soon as he can," Cook told analysts.
Apple's iPad sales in the quarter fell well short of Wall Street's expectations: some analysts had projected shipments of closer to or even more than 6 million for the tablet computer launched on March 11.
But the lower-than-expected number could be attributed to the fact that Apple recognizes revenue from its stores when its customers receive the products. The initial wait time for the iPad 2 was four to five weeks.
"We sold every iPad 2 we could make and the demand was stunning," Apple Chief Financial Officer Peter Oppenheimer told Reuters in an interview.
Apple's results come as it prepares to build the next iPhone model with a faster processor, which will begin shipping in September, three people with direct knowledge of the company's supply chain said Wednesday.
It reported a net profit of $5.99 billion, or $6.40 a share, while revenue surged 83 percent to $24.67 billion. That surpassed expectations for $5.37 in earnings and $23.4 billion of revenue.
A large spike in sales of Mac computers, driven by the refreshed MacBook Pro, beefed up March-quarter earnings. Apple said it sold 3.76 million Macs, up 28 percent from a year ago.
It also sold 18.65 million of the high-margin iPhones, which is the technology company's most important product line.
Gross margins in the fiscal second quarter came to 41.4 percent, above Wall Street's average forecast of 39.03 percent.
Apple, which generally provides an ultra-conservative forecast, said it expected June quarter earnings of $5.03 a share on revenue of about $23 billion.
"IPad shipments were significantly lower than my estimates I think because of supply constraints," said Gabelli & Co analyst Hendi Susanto. "What impressed me was the gross margin."
Shares of Apple jumped 4 percent to $355.79 after hours, from a regular session close of $342.41. They had fallen about 3 percent since Japan's quake.
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