Apple beats estimates; credits iPhone sales

Apple beats estimates; credits iPhone sales

Summary: updated: Apple reported fiscal fourth quarter earnings of $1.14 billion, or $1.

SHARE:

updated: Apple reported fiscal fourth quarter earnings of $1.14 billion, or $1.26 per share, on revenue of $7.9 billion, beating Wall Street estimates of $1.11 per share on $8.05 billion in revenue. (statement) The company credited the strong quarter partly on iPhone sales - "We sold more phones than RIM,” CEO Steve Jobs said in a statement, about Research in Motion, maker of the Blackberry.

Still, investors are looking ahead at the holiday season, asking if a new line of iPods and a refresh of the MacBook line can counter the global economic slump and uncertain consumer confidence. The company provided a wide range for its guidance, putting revenue at $9 billion to $10 billion and earnings per share to $1.06 to $1.35. In a statement, company CFO Peter Oppenheimer said, "Looking ahead, visibility is low and forecasting is challenging, and as a result we are going to be prudent in predicting the December quarter."

In the same quarter last year, Apple reported earnings of $904 million, or $1.01 per share, on revenue of $6.22 billion. Gross margins were 34.7 percent, up from 33.6 percent for the same quarter last year.

CEO Steve Jobs made a rare appearance on the conference call and addressed the folks on the call with his take on the success of the iPhone, growth of the App Store and his general thoughts on the downturn. "We are not economists," Jobs said, noting that the company also isn't sure of the impact of the bumpy economic conditions. "We read the same newspapers you do."

Other highlights from the quarter:

  • The company sold 6.9 million iPhones, taking the company passed its goal of 10 million sold for 2008 - with two months left in the year. The company said iPhone is now 39 percent of the total business.
  • Apple shipped 2.61 million Mac computers, a 21 percent increase over the year-ago quarter. It set a company record for a single quarter.
  • More than 11 million iPods were sold, up eight percent from a year ago. The company said it was record for a non-holiday quarter. It's market share for portable music players remained above the 70 percent mark.
  • The iTunes store has more than 65 million active accounts and a catalog of 8.5 million titles. It has just added more television shows, renewed its content deal with NBC and added high-def programming.
  • The company has $25 billion in cash and zero debt. In a call with analysts, Jobs hinted that the financial position gives the company the "ability to invest our way through this downturn."
  • The iPhone App store expects to see its 200 millionth application downloaded by tomorrow, 102 days since the July launch.

Shares of Apple were down 7 percent in regular trading, closing at $91.49. The stock mostly recovered in after-hours trading, jumping to more than 7 percent in active trading.

apple q4 chart

Topics: Apple, Banking, Enterprise Software, iPhone, Mobility

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Talkback

53 comments
Log in or register to join the discussion
  • 13 Million iPhones so far this year

    That's 13 million even before the holiday season begins. It
    makes Apple now the 3rd largest mobile phone supplier.

    I guess this must come as a big surprise for many (Shade,
    Guiding Light, Sleeper) industry watchers around here.
    Len Rooney
    • It is considering...

      ...that they've sold a bit over 10 million which isn't a surprise - the analyst's estimates of 5 million were appallingly low.

      I suspect you mean the 13 million they've sold since launch in 2007.

      I'd also point out they're third biggest by revenue, not sales, which given they sell one premium product isn't surprising.

      It's always nice to know the facts, isn't it?
      Sleeper Service
      • When the "facts" are this good.... It sure is!!!

        Pagan jim
        anonymous
        • Especially when one has...

          ...a financial interest in Apple performing well. :)
          Sleeper Service
      • Facts. Like ...

        Outselling RIM in the number of units sold last quarter?

        Selling more than 10 million in the year with two and a
        half months yet to go?

        Facts like outselling estimates and selling a record
        number of computers, despite the economic downturn?

        I seem to remember seeing you naysayers claim Apple
        couldn't do any of the above.
        Vulpinemac
        • Point out any post where I've said...

          ...that Apple wouldn't sell 10 million iPhones in 2008.

          Or you can throw your usual baseless assumptions around instead. Whatever.
          Sleeper Service
          • You can't point out any previous post

            where I have used the phrase "bungalow tigers are wobbly under plexiglass" either.

            The non-existence of specific combinations of words does not mean you never trashed apple, which is what they're talking about. And you know exactly what was meant, but decided to blow some smoke instead of responding to the obvious point of the criticism.

            This is a very common (and underhanded) tactic in debating. It's a sign of failure that you had to resort to it.
            bmerc
          • So basically you can't....

            ...which is why you came up with a load of pointless drivel.

            No change there then.
            Sleeper Service
          • not to worry sleeper

            he's wrong anyway. Bungalow tigers are steady as a rock when under plexiglass.

            If he'd ever actually used plexiglass, he'd know this.
            rtk
          • Is it a thick block of plexiglass?

            That stuff is pretty sturdy
            tikigawd
    • To the contrary, Len

      I am quite happy that Apple's stock price will go up on this news, as I wish none of my stock to lose any value, including my Apple stock.

      Because I share a different view of their products then you do, does not mean I wish them poor sales.

      I fully understand the mindset of the people purchasing their products, but just because I own their stock should not lead anyone to believe that I would offer any pretense, or make unaccurate or false statements to raise said value. Apple's business model up to this point is still legitimate, so I will invest.

      I just will not suffer the fools who would have us believe the offerings are anything more then they are.
      GuidingLight
      • And they are?

        Pagan jim
        anonymous
    • Yeah. Considering...

      ... every one of them said Apple wouldn't even get close
      to their 10 million goal.

      Sour grapes, anyone?
      Vulpinemac
      • Except

        The predictions of less than 10 million units were made when Apple first released the iPhone v1.0 in the US only on AT&T.
        rtk
        • That prediction was also made when...

          ... Apple released the iPhone 3G, touting it as an example
          of Apple's failed goal and proving that Apple would never
          sell 10 million during 2008.
          Vulpinemac
  • Strong performance in all major areas

    It's good to see any company making profits these
    days and Apple is doing well in all of their main
    areas.

    While past performance is important, these days
    the ability of a company to do well in the next
    quarter or two is the concern. Apple's $25 billion
    in cash is available for the company to continue at
    the same pace in areas like R&D, software
    development and engineering. That's impressive
    regardless of what computer you use.
    Ken_z
  • RIM 6.1M vs Apple 6.9M

    and RIM didn't benefit from sales of newly introduced product for the full year.
    Intosh
    • RIM is unsustainable

      They need to do more than just email
      justit1234@...
      • I think they realise that...

        ...which is why there is much more focus by RIM on the consumer market. Currently about a third of their subscribers are private individuals and the new take up rate is about 50/50 private/commercial.

        Will it be enough? Who knows?
        Sleeper Service
        • I can tell you that...

          ... at least one major company has seen a lot of its
          Blackberry users discard their RIMs for iPhones.
          Vulpinemac