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Apple bests Street estimates for Q2 earnings

Proactive Investors
Wednesday, 25 April 2012

Smartphone and tablet maker Apple (NASDAQ:AAPL) said second-quarter earnings jumped 93% in the March quarter, boosted largely by stronger-than-expected iPhone sales.

Shipments in the fiscal second quarter totaled 35.1 million units, easily topping Wall Street forecasts of 31 million to 33 million,
while iPad shipments were on the low side of estimates at 11.8 million.

The company's iPhone is widely regarded as the market leader, competing against Google's (NASDAQ:GOOG) Android ecosystem of phones and Research in Motion's (NASDAQ:RIMM)(TSE:RIM) BlackBerry.

Net income for the three months ended March 31 rose to $11.6 billion, or $12.30 per share, from $6 billion, or $6.40 per share, a year earlier, beating a Thomson Reuters consensus estimate of $10.04 a share.

Fiscal second-quarter revenue jumped to $39.2 billion, 59 percent more than a year earlier and 6.5 percent higher than analysts' average forecasts.

"Our record March quarter results drove $14 billion in cash flow from operations, said Apple’s CFO Peter Oppenheimer.

"Looking ahead to the third fiscal quarter, we expect revenue of about $34 billion and diluted earnings per share of about $8.68."

The next quarter's results will be lower because Apple doesn’t expect to sell as many iPhones in the quarter. Customers often hold off on iPhone purchases before Apple releases an upgrade and analysts expect a new version of the handset later this year.

Helped by lower-than-expected commodity costs, gross margins climbed to 47.4 percent from 41.4 percent a year earlier, above Wall Street's average forecast of 42.8 percent.

Sales of the iPad came in at 11.8 million units, below an average forecast of up to 13 million.

Apple's stock has declined over the past few weeks in unusually volatile trading, as investors fretted over potential competitive and pricing pressures.

Apple's stock hit an all-time high of $644 earlier this month but had fallen 13 percent since. Wednesday morning shares were up 9 percent in pre-market trading.

Responding to concerns that wireless carriers may cut iPhone subsidies and lower Apple's profit margin, chief executive Tim Cook said the subsidies weren't large when compared with what carriers can recoup from consumers over a 24-month contract period.

In terms of patent litigation battles, Cook said he preferred to settle. The company is fighting court battles with several Android phone makers, including Samsung, HTC Corp and Motorola (NYSE:MMI) in the U.S. and other countries.

The company, which has said it will finally begin sharing its record cash hoard with investors via a quarterly dividend, added that $74 billion of its $110 billion in cash and securities was now parked outside the United States as of March 31.

Apple's stock gained to $603.81 from a close of $560.28 on the Nasdaq but is still far below an intraday high of $644 marked this month.
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Source: IBTimes.com - on April 24, 2012

News video: Apple Reports Record Sales

Apple Reports Record Sales

Apple reported second-quarter financial results Tuesday that blew past analyst expectations. The company said net income was $11.6 billion, or $12.30 a share -- more than $2.30 ahead of estimates -- as revenue soared to a record $39.2 billion.

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