Apple Profit, Revenue Outstrip Wall Street Forecasts
Appleturned in results that easily surpassed Street expectations, with sales of its iPad tablet exceeding the 7 million mark in the most recent quarter.
The results may ease investor concern about Chief Executive Steve Jobs' decision to take medical leave of absence. Apple reported a profit of $6.43 a share in its fiscal first quarter, up from $3.67 a share last year.
Sales for the most recent quarter jumped to $26.74 billion, from $15.683 billion a year ago.
Both the earnings and topline beat expectations. Analysts who follow Apple forecast the company reporting a profit of $5.40 a share on sales of $24.433 billion, according to a consensus estimate compiled by Thomson Reuters.
All of the company's key product lines exceeded expectations. In the most recent quarter Apple sold 7.33 million iPads, 19.45 million iPods and 4.13 million Macs. Sales of the iPhone jumped 86 percent to 16.24 million units.
Gross margin for the quarter came in 38.5 percent.
"The iPad numbers were huge. The production issues people were worried about are obviously behind and the demand for a new product continues to be strong,'' said Kaufman Bros analyst Shaw Wu.
Jobs' role is "important but at the same time, as the company continues to execute, it becomes more secondary. The way Steve thinks, his methodology, his sense of style: frankly, a lot of it has been ingrained into the Apple culture," Wu said.
Shares of Apple, jumped 15 dollars a share after it reopened at 450pm following a halt for earnings. Trading settled down to about $344 a share by 8pm – below the all time high set Friday.
Shares of Apple, a bellwether for the consumer electronics and technology sectors, leaped 15 dollars a share after it reopened at 4:50pm following a halt for earnings. Trading settled down to about $344 a share by 8pm – below the all time high set Friday. Get after-hour quotes for Apple here.
Apple, which is known for its conservative forecasts, issued an outlook that was above analysts' targets. It expects earnings for the March quarter of $4.90 a share on revenue of $22 billion.
Wall Street was predicting a profit of $4.47 a share on revenue of $20.8 billion.
"We are very impressed with Apple's results, especially the number of iPhone and iPad units sold, which exceeded even the most optimistic estimates," said Mark Bronzo, a portfolio manager at Security Global Investors. "Apple produced 38.5 percent gross margins, showing real operational discipline despite rapid growth. The stock will be volatile because of the news concerning Steve Jobs' health, but we believe the stock heads higher as 2011 marches on."
Apple's show of strength came as Wall Street displays increasing confidence in the management team surrounding Jobs.
Apple shareholders were rattled over the long weekend by news that the iconic CEO is taking a medical leave of absence. The shares, which fell as low as $326 on the news, regained some lost ground later in the session.
Tim Cook, Apple's chief operating officer, will oversee day-to-day operations at the company in Jobs' absence. He's done so twice in the past, when Jobs was on leave during his battle with pancreatic cancer and after the CEO received a liver transplant.
Apple shares closed more than 2 percent lower Tuesday , on volume exceeding 60 million shares, which is more than four times normal.