Apple earnings, 2Q12: $39.2B revenue; 35.1M iPhones sold

Apple's second quarter earnings are out, and it's a doozy: $39.2 billion revenue with 35 million iPhones and almost 12 million iPads sold.

Apple's second quarter earnings are out, and it's another doozy: $39.2 billion in revenue and $11.6 billion in profit, with 35.1 million iPhones and 11.8 million iPads sold.

Apple shares were down 11.42 (2 percent) in anticipation of the news, but have now rebounded in after-market trading.

The company posted a unit increase for iPhones of 88 percent year over year; for iPads, 151 percent. The official iPhone numbers exceed analysts expectations considerably -- they had predicted somewhere around 30 million -- but iPad numbers didn't quite meet expectations, coming in about a million units short.

Sales for Macs came in at about 4 million units, a 7 percent increase; iPods, 7.7 million, a 15 percent unit decline.

What you need to know:

  • Gross margin came in at a whopping 47.4 percent. That's in contrast to the already-formidable 41.4 percent in the year-ago quarter.
  • International sales accounted for 64 percent of the quarter’s revenue.
  • 3Q12 outlook: $34 billion in revenue, diluted earnings per share of $8.68.

What it all means:
  • Apple remains a tremendously strong company, financially, and is still reaping the benefits from its popular iPhone 4S as it rolls out across the globe -- including China.
  • The iPad posted great gains, but it may have been hindered a bit by its release on March 16, which didn't give it quite as much time to gain traction.
  • Macs are holding steady in anticipation of a Pro refresh.
  • The iPod continues to erode as the iPhone takes its place.

But that's the short-term view; the long-term view is more interesting. Aside from a bumpy road immediately ahead -- the third-quarter is no friend to many tech companies -- you've got to wonder how long Apple can ride the iPhone train.

There's already talk of an iPhone 5, sure, but what's more pressing is how much slack there is left in the smartphone market. While profits from existing iPhone users who upgrade every couple of years (and Android users who switch) aren't to be discounted, the real action is in the far-flung places where feature phones still rule, and where smartphone manufacturers haven't yet made converts. It's those battles that Apple needs and is poised to win, and where momentum can be continued.