Date: Wednesday, July 21st, 2010, 04:37
Category: Finance, News
Apple generated its best quarter to date, reporting US$15.7 billion in sales and a profit of US$3.25 billion yesterday with shares accelerating US$3.51 per share, up 75% in the year over year from the same period in 2009. The company’s results beat analyst expectations of $3.10 a share and $14.74 billion in revenue according to Macworld.
The company sold a record 3.47 million Macs during the three-month period ended June 26, 2010, another quarterly record for the company that topped the previous high sales mark by 100,000 units. Mac sales increased 33% over the 2.6 million units Apple sold in the third quarter of 2009. Oppenheimer noted that Apple’s 33% sales growth topped the 22% growth rate market research firm IDC projects for the overall computer market.
As expected, portables drove Mac sales for the three months ending in June. Of the 3.47 million Macs sold, 71% were laptops.
The third quarter also marked the first full quarter of sales for the iPad, Apple’s new tablet. Apple said it sold 3.27 million iPads during the quarter with the company seeing US$2.17 billion in recognized revenue from iPad sales during the quarter. The tablet is currently shipping in 10 countries, and Apple plans to introduce the iPad to 9 more countries on July 23rd. The company also stated that it’s selling iPads just as fast as it’s making them, while attempting to increase manufacturing capacity.
Apple sold 8.4 million iPhones in the third quarter, a 61% jump over last year’s figures. The iPhone 4, which debuted in the waning days of the third quarter, made up about 20% of those sales—or more than 1.7 million units. Apple called the iPhone 4 launch the most successful product launch in its history.
Consumer demand for the new phone has been so great, in fact, that Apple has had trouble filling orders. Last month, the company announced that it would delay the release of the white iPhone 4—it’s expected to ship by the end of July. iPhone 4 orders placed through Apple’s online store list a three-week shipping wait as of this writing. (In contrast, the 8GB iPhone 3GS ships within 24 hours.)
Apple saw recognized revenue from its handsets of US$5.33 billion during the quarter, up 74% from last year’s figures. Apple says the iPhone has a sales value of US$5 billion, for an average selling price of US$595.
Combining the sales of the iPhone, iPad, and iPod touch, Apple sales there are now 100 million devices running its iOS mobile operating system.
iPod sales fell during the third quarter of 2010. Though the company sold 9.41 million iPods, the figure represented an 8% drop from the 10.2 million music players Apple sold in the year-ago quarter. The iPod segment has seen declining growth for some time now, particularly outside of the holiday shopping season. During the fiscal second quarter, iPod sales dipped by 1% while the 2009 third quarter saw a 7% decline in sales.
Despite the decline, the music device remains the top-selling MP3 player internationally and continues to command a 70% market share in the U.S. More significantly to Apple, the iPod touch continues to grow with Apple stating that sales of that product were up 48% from the year-ago quarter, leading to a 12% increase year-over-year in average selling price for the music player. Apple’s iPod segment saw quarterly revenue of US$1.5 million, a 4% increase from last year.
With regard to the iTunes Store, Apple cited more than $1 billion in revenue, a growth rate of 25% year over year. The mobile app segment of the store has grown to 225,000 apps, with 11,000 specifically built for the iPad. Users have download more than 5 billion apps from the App Store, Apple says.
Apple ended the third quarter with 293 Apple Store locations, the company opening seven more during the three-month period. Four of those new stores were opened in the U.S., while two opened in Australia; the remaining new store was in Canada.
Retail stores generated US$2.58 billion in revenue during the quarter, jumping 73% from the year-ago numbers. Apple sold 677,000 Macs via its retail stores, compared to 492,000 last year; half of the Macs sold at Apple Store were to customers new to the platform, Apple says.
Apple plans to open 24 stores during the fourth quarter. In addition to an outlet in Shanghai, China, that opened earlier this month, noteworthy store openings include ones in Paris, London, and Apple’s first two stores in Spain.
Apple ended its fiscal third quarter with US$45.8 billion in cash and short-term investments, up from US$41.7 billion at the end of last quarter.
For the fiscal fourth quarter ending in September, Apple expects revenue of US$18 billion and earnings per share to come in around US$3.44. Analysts were predicting sales of US$17.03 billion and earnings of US$3.82 per share in advance of Apple’s announcement on Tuesday.
Apple said it would defer revenue during the quarter as a result of its decision to offer free cases to iPhone 4 customers. Last week, the company made its free case offer after reports of reception problems related to the placement of antennas in the iPhone 4. Oppenheimer put the cost of the case giveaway at US$175 million; Apple will recognize the cost of those cases as they’re delivered to customers.
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