SAN FRANCISCO—Apple Inc. Tuesday (April 24) reported another stellar quarter of sales and earnings, but delivered a sales target for the current quarter that was below most analysts' expectations.
Apple (Cupertino, Calif.) reported sales of $39.2 billion for the quarter ended March 31, down 15 percent compared to the previous quarter. Sales for the quarter were up 59 percent compared with the year-ago quarter. It was Apple's second highest sales quarter ever, trailing only the previous quarter.
Apple reported a profit for the quarter of $11.6 billion, or $12.30 per diluted share, down 11 percent from the previous quarter. The quarterly profit was up 94 percent compared with the year-ago quarter.
Apple's results for the quarter, the company's second quarter of fiscal 2012, came in above consensus analysts' expectations, which called for sales of $36.8 billion and earnings per share of $10.06 billion.
"We're extremely pleased with our record March quarter performance with earnings nearly doubling year-over-year," said Peter Oppenheimer, Apple's chief financial officer, in a conference call with analysts following the quarterly report. "The new iPad is off to a tremendous start and is our fastest iPad rollout ever. We're thrilled with the global success of the iPhone 4S, which is now available in more than 100 countries, including China."
Oppenheimer and Tim Cook, Apple's CEO, said Apple's newest iPad, unveiled in March, has proven to be extremely popular. Apple said it sold 11.8 million iPads in the quarter, down 24 percent from the previous quarter but up 151 percent compared with the year-ago quarter.
"The new iPad is on fire. We're selling them as fast as we can make them," Oppenheimer said.
In two years since Apple started shipping the original iPad, Apple has sold a total of 67 million iPads, Cook said. He added that it took Apple 24 years to sell that many Macs, five years to sell that many iPhones and three years to sell that many iPods.
"We were extremely happy with the trajectory on all of those products," Cook said, adding that iPad is a "profound product."
Sales of iPhones in the quarter totaled 35.1 million, down 5 percent from the previous quarter but up 88 percent compared with the year-ago quarter. Apple said it sold 4 million Macs in the quarter, down 23 percent from the previous quarter but up 7 percent from the year-ago quarter. Apple also reported that it sold 7.7 million iPods during the quarter, a unit decline of 50 percent compared with the previous quarter and 15 percent compared to the year-ago quarter.
Apple reported that its gross margin for the quarter was 47.4 percent, up from 44.7 percent in the previous quarter and 41.4 percent in the year-ago quarter. International sales accounted for 64 percent of Apple's revenue in the quarter, the company said, up from 58 percent in the previous quarter.
But Apple said it expects both sales and profit to decline in the current quarter. The company said it expects sales of about $34 billion and earnings per share of about $8.68. Sales of $34 billion would represent a sequential decline of about 13 percent.
Apple's sales target for the current quarter came in below consensus analysts' expectations, which called for sales of about $37.4 billion, according to Yahoo Finance.
It is indeed difficult to see how Apple can maintain the growth, but then it has been that way for several years and we're still waiting for the opportunity for all of the doomsayers to finally be able to say they told us so. Of course, there were some that tried to say that the past couple of weeks, but where are they now? All of the conjecture is just that. It is very interesting to watch what happens while we have people trying to make largely uninformed predictions and then compare those with the actual results.
I think they have the *ability* to make whatever magic happen. I even think they have the intuition to spot the next divergent technology.
The question is: can Cook sell it? Any new disruptive technology is faced with a huge when it first launches. Few believed that the iPhone would succeed like it did. Absolutely nobody thought the iPad was anything but a large iPhone that nobody would buy (myself included). We were wrong. But Jobs *sold* it anyway. He pushed past our unbelief. Cook has a big turtleneck to fill to make that happen.
I think Apple is predicting a decline because it knows that the market is getting over-sold. With the 3rd gen iPad (I refuse to call it the "new iPad", and usually refer to it as the iPad 2S), most people have the device that want it, and only serious late adopters are coming on board now. I also think that fewer people upgraded than usually do with the release of the 2S, something of a decline for Apple's usually devoted and upgrade-hungry followers.
Apple is being very business as usual right now, post-Jobs. While this will maintain for a little while, I don't think it can last. In 2-3 years they are going to have to come up with another game changer or MS and Android are going to surpass them.
The cycle has usually gone: Apple changes the game, competitors spend a year or so playing catch-up, competitors surpass Apple by putting in features that Apple missed, Apple tries to catch up with these features and pretends it came up with them first, then just when Apple seems to be losing again they change the game... and repeat. iPod to iPhone to iPad to ??
Apple are themselves surprised to have achieved this success and the high share price is worrying them, which is why they are selling shares in small amounts.
The competition has not been very well organised, and the appeal of Apple products has remained strong.
They have several products lined up, I expect, but no need to launch until they can make enough to satisfy existing demand.
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