Apple on Monday said profits for the fourth fiscal quarter soared 67%, as strong sales of the iPod and the iPhone apparently helped whet consumers' appetite for the Mac.
The computer maker in the quarter ended Sept. 30 shipped 2.2 million Mac computers, a 34% jump over a year ago and 400,000 more units than the company's previous quarterly record. Apple apparently benefited from the "halo effect" caused by consumer love of the iPod and the iPhone. More than 90% of customers would recommend either product to others, according to the company.
The company sold 10.2 million iPods in the quarter, a 17% increase over the same period a year ago. IPhone sales, meanwhile, reached 1.1 million, bringing total sales in fiscal 2007 to 1.4 million. The iPhone went on sale June 29.
The computer maker said net profit for the quarter ended Sept. 30 was $904 million, or $1.01 a share, compared with $542 million, or 62 cents a share, in the same period a year ago. Revenues rose to $6.22 billion from $4.84 billion a year ago.
Apple easily beat Wall Street estimates. Analysts on average had expected revenues of $6.07 billion, and earnings of 86 cents a share, according to Thomson Financial. In after hours trading, Apple stock was up more than 7% to $186.75.
"Apple is executing on all cylinders right now. They are the New England Patriots of the tech world, appearing to be an unstoppable force," Samir Bhavnani, analyst for Current Analysis West, said in an e-mail. "The amazing thing is, the laptop lineup hasn't been revamped in a while and it would not surprise me to see new notebooks being announced alongside Leopard later this month." Leopard is the next version of the Mac operating system, which is set to ship on October 26.
Peter Oppenheimer, chief financial officer for Apple, told analysts during a conference call that the company was bullish on the first quarter of fiscal 2008, because the company was shipping the "best products ever made in its history."
"We're quite confident in the business and we're ending the fourth quarter with momentum," he said.
For the first fiscal quarter of 2008, Apple forecast revenue of about $9.2 billion and earnings of $1.42 a share. The company ended the 2007 fiscal year with $15.4 billion in cash and no debt.
Timothy Cook, Apple's chief operating officer, told analysts that the quarter ended an "incredible year for the Mac," which was helped by the iPod introducing the Apple brand to many people. More than 50% of the Macs sold in Apple retail stores were to people who had never owned a Mac before, Cook said. The company also had the "most successful back to school season it ever had."
In the last calendar quarter of 2007, Apple planned to expand the number of Best Buy stores selling the Mac and iPod to more than 270. "We very pleased with it," Cooks said of Best Buy. "It had splendid results." As of the end of September, 230 Best Buy stores sold Apple products.
Apple executives acknowledged that iPhone sales were helped by the company slashing the price by $200 in September. While declining to give numbers, Cook said. "We obviously saw an acceleration after the price cut, but we're not going to get into daily sales." The company expected to reach sales of 10 million iPhones in 2008.
Piper Jaffray analyst Gene Munster reported in September that sales of the iPhone climbed from 9,000 per day at the $600 price tag to 27,000 per day at $400. Munster believed the initial surge would eventually scale down to a solid 50% increase in sales compared with the pre-price cut number.