Apple earnings beat analyst estimates but iPad falls short

Apple earnings beat analyst estimates but iPad falls short

Summary: Booming sales of its laptop and mobile phones helped the company achieve a net profit of nearly $6bn during the last three months, but sales of iPads missed analyst expectations

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Soaring growth in iPhone sales and an increase in the number of Macs shipped contributed to strong quarterly revenue, Apple said in its latest financial report on Wednesday.

Apple MacBook Pro

Growth in iPhone, Mac and MacBook sales contributed to strong quarterly revenue at Apple, although iPad sales slightly missed analyst expectations. Photo credit: Apple

In total, Apple's net revenue for the second quarter of its current fiscal year was $24.67bn (£14.87bn), equating to a net profit of $5.99bn. Sales of iPhone handsets rose 113 percent in comparison with the same period in 2010, equating to 18.65 million units shipped. The iPhone 4 was released in June 2010.

Gartner mobile analyst Carolina Milanesi said the better-than-anticipated iPhone sales were partly due to the extension of sales channels to countries such as Saudi Arabia and South Korea. She also noted that the boom in sales was most likely aided by discount offers in the US.

Sales of iPad tablets — the second version of which launched on 25 March in the UK — were slightly below analyst expectations, with 4.69 million units sold during the quarter. However, during an investor earnings call Peter Oppenheimer, Apple senior vice president and chief financial officer, said the company was "thrilled with its momentum" and that it "sold every iPad 2 that we could make during the quarter".

Despite the lower-than-expected iPad sales figures, Milanesi argued that the iPad was still the tablet competitors needed to beat.

"iPad sales were slightly lower than industry expectations and I think this had to do with the fact that iPad 2 was in higher demand than what was left in the channel of first-gen iPads... this should not be taken as a decreased interest," Milanesi said. "iPad continues to be the benchmark for the industry."

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Mac sales during the same period, which ended on 26 March, totalled 3.76 million units, equating to a 28-percent increase year-on-year. Apple said strong sales of the MacBook Air range — which was refreshed towards the end of 2010 — and the MacBook Pro contributed to the increase.

Despite the company's strong performance in other product lines, Apple reported a 17-percent decline in iPod sales compared to its second quarter in 2010. However, Oppenheimer said iPod figures were still "ahead of our expectations, with the iPod Touch continuing to count for over half of all iPods sold".

The company also said its app store was "incredibly successful" with more than 350,000 apps available and "well over" 10 billion downloads to date.

During the earnings call, Apple was also quizzed over the lawsuit filed against Samsung on Friday. "We felt the mobile communication division of Samsung had crossed the line, and after trying for some time to work the issue, we decided we needed to rely on the courts," said Tim Cook, chief operating officer at Apple.

Emphasising the companies' strong working relationship, Cook said he did not expect the suit to hurt the business relationship with Apple's "valued component supplier".


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Topic: Tech Industry

Ben Woods

About Ben Woods

With several years' experience covering everything in the world of telecoms and mobility, Ben's your man if it involves a smartphone, tablet, laptop, or any other piece of tech small enough to carry around with you.

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