Apple knocked one out of the park with its first quarter earnings, but in the process threw all of us for a curve as the company adopted accounting changes, and essentially took what was non-GAAP numbers and turned them into GAAP results instead.
So, on that basis, Apple reported $3.67 a share in what it now calls GAAP results, because of the accounting change, compared to the $3.50 anticipated. That news came on dramatically better revenue, of $15.68 billion compared to the $14.96 billion consensus. The company's gross margin was also 40.9 percent.
On a unit by unit basis, Apple's big success came with its Mac sales, a record 3.36 million units sold when analysts anticipated something closer to 3 million units. Apple reports 21 million iPods sold, and 8.74 million iPhones, though that iPhone number was a little below the 9 million units some on the Street expected.
Steve Jobs says on an annualized basis, Apple is now doing better than $50 billion a year, and the company's CFO Peter Oppenheimer says Apple generated $5.8 billion in cash during the quarter, which was its most profitable and highest revenue generating quarter ever.
So what happened here?
Apple changed the way it accounts for iPhone sales, a bugaboo with Apple investors since the product was released, and Apple adopted a so-called subscription accounting method which dramatically diluted just how profitable these devices really were for the company.
The Financial Accounting Standards Board allowed for a change that more accurately reflected what these sales really translate into and Apple apparently is taking advantage of that change. So today's GAAP number is actually yesterday's non-GAAP numbers, and we have the unusual circumstance of taking Apple's GAAP report and using the Street's non-GAAP estimates as the apples-to-apples comparison.