iPhone sales power Apple's blockbuster quarter
Apple yet again blew away predictions to record another blockbuster quarter, with revenues jumping by 82 percent to $28.6 billion, against $15.7 billion in the same quarter last year. Profits more than doubled from $3.25 billion to $7.31 billion, as Apple increased its gross profit margin to 41.7 percent, compared to 39.1 percent in last year's fiscal third quarter. This is astonishing growth for such a large company.
Analysts had been expecting revenues of about $24.8 billion, according to data compiled by Bloomberg. Apple beat that by more than $1 billion per month. Some analysts may have been cautious because Apple's third quarter usually benefits from the launch of a new iPhone, which this year is not expected until September. However, it was the iPhone that drove Apple's success, with shipments growing by 142 percent to 20.3 million units.
Apple also said it sold 9.25 million iPads during the quarter (up by 183 percent), 3.95 million Macs (up 14 percent) and 7.54 million iPods (down 20 percent). Mac sales grew more slowly than previously, and the decline in iPod shipments was about a million greater than analysts had expected.
Peter Oppenheimer, Apple’s chief financial officer, said in the earnings statement: "We are extremely pleased with our performance which drove quarterly cash flow from operations of $11.1 billion, an increase of 131 percent year-over-year. Looking ahead to the fourth fiscal quarter of 2011, we expect revenue of about $25 billion and we expect diluted earnings per share of about $5.50." This is lower than the latest quarter's $28.6 billion and $7.79 per share.
After the results, Apple shares climbed to $405 in extended trading, after closing at a record $376.85.
The share price would probably be higher, but there is some concern about whether Apple can sustain its explosive growth without co-founder Steve Jobs. Today, The Wall Street Journal reported that: "Since Steve Jobs went on medical leave this winter, some members of Apple Inc's board have discussed CEO succession with executive recruiters and at least one head of a high-profile technology company, according to people familiar with the matter. The conversations weren't explicitly aimed at recruiting a new chief executive and were more of an informal exploration of the company's options, said these people." (The full article is behind a paywall.)