Apple reported strong earnings for its March quarter that surpassed analysts' expectations. iPhone shipments of 35.1 million units exceeded estimates, driving a 93% surge in earnings, though iPad shipments came in slightly below targets. Shares jumped in after-hours trading following the positive report. Apple CEO Tim Cook said results set the company up well for new product launches and that the iPhone remains the top smartphone for driving upgrades from basic phones.
2. Apple Inc. said Tuesday that its earnings surged 93% in the March quarter, largely powered by stronger-
than-expected sales of the iPhone.
IPhone shipments of 35.1 million units easily surpassed Wall Street’s estimated range of 31 million to 33
million for the period. Shipments of the iPad came in at 11.8 million — on the low side of analysts’
targets, as the company’s newest version of the tablet did not launch until late in the quarter.
Apple shares AAPL -2.00% jumped 7% in after-hours trading following the report. The stock had been in
tailspin, shedding 13% since topping out at an all-time high of $644 on April 10. The shares closed down
2% at $560.28 on Tuesday before the report.
Multiple concerns have weighed on the stock in recent days, including worries about the subsidies that
wireless carriers pay to sell the iPhone, as well as a shortage of 28-nanometer chipsets used in
smartphone devices from Qualcomm, an Apple supplier. Profit taking was also a likely factor, as the
stock had run up by 59% for the year when it hit its high.
With these strong results, it sets up the company very well for the months ahead, with the iPhone 5
coming. Per usual practice, Apple offered highly conservative guidance for the current quarter that was
below analysts’ forecasts. If they have half the beat they had this quarter, they’ll still beat their forecast
easily.
For the period ended March 31, Apple reported net income of $11.6 billion, or $12.30 per share,
compared with earnings of $6 billion, or $6.40 per share, for the same period last year. Revenue jumped
59% to $39.2 billion.
Analysts were expecting earnings of $10.07 per share on revenue of $36.96 billion, according to
consensus forecasts from FactSet Research.
Mac shipments came in at 4 million for the quarter — in line with analysts’ expectations — while iPod
shipments totaled 7.7 million. Mac sales fell by 23% from the December quarter, leading to some
analysts wondering if the product is being cannibalized by the iPad.
On a call with analysts, Apple CEO Tim Cook said the PC market is slow overall, and there was likely
some cannibalization from the iPad, but that the Mac still outperformed the rest of the market.
“Finally, and this is most important, is that the iPhone is the best smartphone on the planet to entice a
customer who is currently using a traditional mobile phone to upgrade to a smartphone,” he said,
adding that “this is by far the largest opportunity for Apple” and for carriers.