Apple Crushes Wall Street Expectations - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

IoT
IoT
Infrastructure // PC & Servers

Apple Crushes Wall Street Expectations

Apple's sold record numbers of Macs and iPhones in the fourth quarter. But iPhone sales will face tough competition from new Verizon smartphones.

Apple profits soared in the fourth quarter, lifted by record Mac and iPhone sales, the company reported on Monday.

For the quarter ended Sept. 26, Apple said profits rose to $1.67 billion, or $1.82 per share, from $1.14 billion, or $1.26, a share, in the same period a year ago. Revenue in the quarter was $9.87 billion, compared to $7.9 billion a year ago.

Apple's results smashed Wall Street expectations. Analysts surveyed by Thomson Reuters expected on average earnings of $1.42 a share on revenue of $9.2 billion. After the announcement, Apple stock rose by about 7% in after hours trading to more than $203 a share.

Apple sold 3.05 million Mac computers during the quarter, a 17% increase over the year-ago quarter. The company sold 7.4 million iPhones, a 7% increase. Sales of iPods, however, fell 8% to 10.2 million units, a reflection of what has become a saturated media player market.

"We are thrilled to have sold more Macs and iPhones than in any previous quarter," Steve Jobs, Apple chief executive, said in a statement.

Gross margin for the quarter increased year-on-year to 36.6% from 34.7%. International sales accounted for 46% of Apple's revenue in the quarter. For the full fiscal year, Apple's revenue rose by 12% to $36.5 billion and net income 18% to $5.7 billion.

While other computer makers are struggling during the economic recession, Apple has managed to keep sales and profits growing. Because Apple sells mostly to consumers, it has done better during the downturn than manufacturers more dependent on business sales. While consumers continue to buy computers, particularly laptops, businesses have cut way back and probably won't resume buying until next year.

"Apple's business model seems to be doing well in the current economic climate," Michael McGuire, analyst for Gartner, told InformationWeek.

Going forward into the holiday shopping season, Apple will have increasing competition from computer makers with new products running Windows 7, which Microsoft plans to release Thursday.

In addition, Verizon will likely heat up competition against the iPhone. Verizon is getting ready to ship smartphones based on Google's Android OS. While Apple has done well selling iPhone hardware, much of the competition against Verizon will be out of Apple's hands. Apple has an exclusive iPhone partnership with AT&T, and that company will need to improve its data network to match Verizon, McGuire said.

For the fiscal first quarter of 2010, Apple expects revenue in the range of $11.3 billion to $11.6 billion, and predicted earnings for the quarter to range from $1.70 to $1.78 a share.

This bMighty Webcast explores how midsize businesses can keep their laptops secure. It happens Thursday, Oct. 15, 2009. Find out more and register.

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
News
Top 10 Data and Analytics Trends for 2021
Jessica Davis, Senior Editor, Enterprise Apps,  11/13/2020
Commentary
Where Cloud Spending Might Grow in 2021 and Post-Pandemic
Joao-Pierre S. Ruth, Senior Writer,  11/19/2020
Slideshows
The Ever-Expanding List of C-Level Technology Positions
Cynthia Harvey, Freelance Journalist, InformationWeek,  11/10/2020
White Papers
Register for InformationWeek Newsletters
Video
Current Issue
Why Chatbots Are So Popular Right Now
In this IT Trend Report, you will learn more about why chatbots are gaining traction within businesses, particularly while a pandemic is impacting the world.
Slideshows
Flash Poll