Apple Defies Slump, Reports Strong Sales, Profit
The Cupertino, Calif. company Tuesday reported that quarterly profit rose 58% from a year ago, thanks to strong sales of Mac computers, iPhones, iPods and strong demand for recent software releases.
Revenue grew 35% to $9.6 billion, an increase of nearly $2.5 billion from the year-ago quarter. Domestically, revenue grew 27% from the prior year, compared with internationally at 46%.
Operating margin for the quarter was better than expected at 22.1%, resulting primarily from higher-than-anticipated gross margin and revenue. Net income grew 57% to $1.58 billion, or $1.76 per share.
Analysts surveyed by Thomson Financial estimated that Apple would earn $1.62 a share on revenue of $9.47 billion for its first fiscal quarter, ended Dec. 31.
Boosting revenue and profit during the quarter, Apple sold 22 million iPods and about 2.3 million iPhones during the quarter. Mac products and services contributed 47% to quarterly revenue. Apple shipped 2.3 million Macs--up more than 700,000 units from the prior quarter, which represents 44% growth. That's more than 2.5 times the overall market rate of growth for the December quarter, based on the latest forecast published by research firm IDC, according to Apple CFO Peter Oppenheimer during a call with analysts and investors.
Sales of the new iMac announced in August helped to drive 53% growth in desktop systems, and 38% in portable computers year-over-year.
Revenue from iPhone, iPhone accessories and payments from carriers brought in $241 million. Total deferred revenue from Apple iPhone and Apple TV was $1.44 billion at the end of the December quarter, compared with $636 million sequentially.
Apple retail stores posted $1.7 billion in revenue representing 53% year-over-year growth. Store traffic hit a new record with 38.4 million visitors from October through December, increasing more than 10 million visitors from the prior quarter.
Total purchases at The Apple Store grew 90% compared with the prior year's quarter--up from 207,000 in purchases during November 2006, to 394,000 in purchases during November 2007, according to Nielsen Online.
Just in time for Valentine's Day, Apple also introduced a pink iPod nano earlier in the day, complete with 8GB of storage for $199--about the same price as a bouquet of flowers and box of chocolate. Not bad, considering flowers wilt, chocolate adds unwanted fat, but the music player keeps people singing to their own tune for up to 24 hours of audio or 5 hours of video per charge.