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Surging iPhone sales spur Apple, shares stand strong

Surging iPhone sales spur Apple, shares stand strong
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First Published: Wed, Oct 22 2008. 12 24 PM IST
Updated: Wed, Oct 22 2008. 12 24 PM IST
San Francisco: Apple Inc reported a stronger-than-expected 26% rise in quarterly profit, spurred by strong sales of its new iPhone and its shares rose 13% on Tuesday.
Apple posted a six-fold increase in iPhone shipments during the September quarter, the first since it released a faster, next-generation model. The company said it sold 6.89 million iPhones during the quarter, outpacing Blackberry-maker Research in Motion Ltd.
Oppenheimer analyst Yair Reiner called the iPhone shipments a “pretty stunning number” and said the company’s revenues do not fully reflect the strength of iPhone demand because Apple records sales from the phone over a two-year period.
Apple, which is famously cautious in its outlook, issued forecasts for the important December quarter that were below Wall Street estimates, but investors and analysts said it was probably another example of Apple lowering expectations only to exceed them later on.
“Looking ahead, visibility is low and forecasting is challenging and as a result we are going to be prudent in predicting the December quarter,” Apple Chief Financial Officer Peter Oppenheimer said in a news release.
Apple reported a profit in its fiscal fourth-quarter ended 27 Septemberof $1.14 billion, or $1.26 a share, up from $904 million, or $1.01 a share, in the year-ago period. Revenue rose 27% to $7.9 billion.
Analysts were expecting the company to post a profit of $1.11 a share on revenue of $8.04 billion, according to Reuters Estimates.
The company said its fourth quarter figures would have been better if it fully accounted for iPhone revenue. Including deferred revenue from the iPhone, sales in the quarter would have reached $11.68 billion and $2.44 billion in net income.
In the past, Apple had not provided adjusted figures, which include all the revenue it defers from the iPhone and Apple TV. If it had not deferred iPhone revenue, the phone would have represented 39% of Apple’s sales in the September quarter, according to the company.
Apple executives said it was not sure how the economic downturn would affect it, but emphasized its product line-up was strong, its balance sheet solid and its customers loyal.
“While they may postpone purchases in tough times, they’re unlikely to abandon them,” said Chief Executive Steve Jobs on a conference call with analysts. “We may get buffeted around by the waves a little bit, but we’ll be fine and stronger than ever when the waters are calm in the future.”
For the holiday quarter ending in December, Apple forecast a profit between $1.06 a share and $1.35 a share on revenue of $9 billion to $10 billion. Analysts, on average, were expecting earnings of $1.69 on revenue of $10.7 billion in the period, according to Reuters Estimates.
“As you look at the December quarter, it looks like pretty wide guidance and they’re missing the consensus by quite a bit,” said Vijay Rakesh, an analyst at ThinkPanmure. “It kind of goes hand in hand with what we’re seeing with the consumer spending slowdown.”
In the September quarter Mac shipments increased 21% from last year to 2.61 million, while iPod shipments rose 8% to 11.05 million.
The shares of Cupertino, Calif.-based Apple closed the regular session down $6.95, or 7.06%, at $91.49. In extended trading, the stock rose to $103.75.
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First Published: Wed, Oct 22 2008. 12 24 PM IST
More Topics: Apple | iPhone | Sales | Profits | Shares |