Apple crushed third quarter estimates as it sold more iPhones and iPads than Wall Street expected.
The company reported earnings of $7.31 billion, or $7.79 a share, on revenue of $28.57 billion. Wall Street was expecting earnings of $5.85 a share on revenue of $24.99 billion. On a conference call with analysts, Apple CFO Peter Oppenheimer said:
"We're extremely pleased with the momentum in our business."
Apple's June quarter was propelled by the iPhone and iPad. The company's Mac and iPod units were light relative to estimates (preview). Oppenheimer said that he was upbeat on Mac strength and the launch of Mac OS X on Wednesday. He added that iPhone momentum in Asia was "particularly robust." The iPhone is now available in 105 countries as Apple expanded its international distribution deals with carriers.
Here's the tally:
- Apple sold 20.34 million iPhones in the quarter.
- 9.25 million iPads were shipped, up 183 percent from a year ago.
- 3.95 million Macs were shipped. That sum was below expectations, but analysts expected lower units due to a Mac refresh on deck.
- 7.54 million iPod units moved in the third quarter, down 20 percent from a year ago.
For comparison, this chart highlights expectations going into the earnings report.
In other words, Apple topped iPhone unit expectations by nearly 4 million devices. Apple's iPad units were also well ahead of estimates.
Among the key points from the conference call:
- Oppenheimer talked about a product transition in the September quarter that may hamper margins. He didn't give any further details.
- The company cited enterprise strength for the iPhone and iPad.
- There is some cannibalization of the MacBook from the iPad 2.
By the numbers:
- Apple generated cash flow from operations of $11.1 billion.
- The company projected earnings of $5.50 a share on revenue of $25 billion. Wall Street was expecting earnings of $6.45 a share on revenue of $27.7 billion. Apple historically lowballs Wall Street on guidance.
- Research and development spending was $628 million, up from $464 million a year ago. For the nine months ending June 25, Apple has spent $1.78 billion on R&D, up from $1.28 billion for the same period a year ago.
- Apple ended the quarter with $12.1 billion in cash and cash equivalents and another $16.3 billion in short-term marketable securities.
Here's a look at the international sales breakdown and product mix:
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