Apple profit up on hot iPhone sales

Apple brought in some big numbers today, reporting a profit that soared 26% to $1.26 a share. That's far more than the $1.11 a share that analysts were looking for. But revenue was a bit of a disappointment, even though it jumped 27% to $7.9 billion. Analysts wanted $8.02 billion.

Still, investors are thrilled with the results, pushing Apple shares up 12% in after hours. They had fallen 7% today before the market closed.

The star of the quarter will probably be the iPhone. Apple sold 6.9 million of them in the quarter, and analysts were only expecting around 5 million. A lot of the iPhone's revenue is tucked away, however, because Apple doesn't show it on the books until months after it's received. Apple shows $11.68 billion in "adjusted" revenue and $2.44 billion in "adjusted" net income.

Apple has officially hit its goal of selling 10 million iPhones in 2008, CFO Peter Oppenheimer said.

CEO Steve Jobs pointed out in a statement that Apple sold more phones in its quarter than Research in Motion, the maker of the BlackBerry. (RIMM sold 6.1 million BlackBerries in the quarter ended Aug. 30). And Jobs admitted he didn't know how the economic downturn would affect the company, but that Apple has $25 billion in cash in the bank and no debt.

But the company gave an even more conservative forecast for the December quarter than usual, citing low visibility. Revenue could be anywhere from $9 billion to $10 billion, it said, and EPS could be between $1.06 and $1.35. That's what below what analysts were looking at walking into today's results.

Jobs made a rare appearance in an Apple earnings call today, likely to reassure investors that the company was strong amid turbulent times. "We may get buffeted around by the waves a little bit, but we'll be fine," he said.

Here's what others have to say about the news:

"The iPhone 3G is clearly off to a tremendous start. It looks as though it will provide a new leg of growth in the company's story." -- Edward Jones analyst Bill Kreher

"I still fully expect the company to gain share even in this turbulent economy." -- Jim Grossman, an analyst at Thrivent Financial for Lutherans

"Overall, Apple does seem to be feeling the effect of the economic slump, but it appears that the iPhone 3G is currently enough to wipe away the slowdown in the sales of the rest of the company's hardware." -- Ars Technica

Back to Top Stocks Digg this | Email this | Link to this

Comments

 

sales of iphone & mac will grow again in the next quarter

ben (Posted 10.22.08 4:24 AM) Report Abuse

Apple products selling well in a poor economy? The economy is not that bad if millions are buying products that we dont really need....If the economy was that bad people would not buy these products...something to think about.

alvin (Posted 10.22.08 10:18 AM) Report Abuse

Alvin is right.  If things were that bad would that many people be buying things that maybe they don't really need?  Or is it just our society and an excellent example as to why we are in the mess we are in?  We seem to be in love with gadgets and have to always have what is "in" regardless if we need it or can afford it.  Indeed think about it.

Wake up People (Posted 10.22.08 11:20 AM) Report Abuse

Things are that bad...People use primarily CREDIT CARDS to pay for these $400 phones...For many people, Credit Cards are used as EMERGENCY or MASKING purposes. Think of how many teenagers and college students plus young professionals there are with IPHONES...let's be honest, how many of the MILLIONS of them actually pay in cash hmmmmm...I'm willing to bet that market accounts for more than 50% of the purchasing demographic. Please people, how many people do you know, that don't have the money to spend, blow it away on garbage anyway????? No one likes to admit there struggling.

Let's be honest people (Posted 10.31.08 8:26 AM) Report Abuse

Market Update

Dow | Nasdaq | S&P

Subscribe to this blog