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Apple profit doubles as iPhone fuels sales

THIS STORY APPEARED IN

January 25, 2012

People lined up to buy iPhone 4S in a China Unicom stor (Getty Images )

Apple Inc. reported quarterly profit that more than doubled as holiday purchases of the iPhone catapulted sales to a record and helped the company steer clear of the consumer-spending slump that has hurt rival companies.

Fiscal first-quarter profit surged to $13.1 billion, or $13.87 a share, Apple said today in a statement. Sales rose 73 percent to $46.3 billion. Analysts surveyed by Bloomberg on average estimated profit of $10.14 a share on sales of $39 billion. Per-share profit for the quarter was more than the company earned in any fiscal year before 2010.

Apple sold 37 million iPhones, up from the previous record of 20.34 million. Customers snapped up the 4S model that went on sale in October, a week after the death of co-founder Steve Jobs. The results mark the first time the company’s quarterly revenue topped Hewlett-Packard Co.’s, underscoring how its focus on sleek touch-screen mobile devices has reshuffled leadership in the industry.

“Those numbers are just unimaginable,” said Michael Obuchowski, chief investment officer at First Empire Asset Management, which has $4 billion under management, including Apple shares. “It’s still an extremely well-managed company and they are showing that the product pipeline is sufficient even now to generate growth rates that are unrivaled.”

Apple shares soared as much as 12 percent to $468.95 in extended trading, surpassing their record closing price of $429.11 on Jan. 18. The stock, up 25 percent in the past 12 months, had closed at $420.41 in New York today before the report.

Higher Forecasts

Cupertino, California-based Apple, in looking ahead to results for the second quarter, forecast revenue of about $32.5 billion and profit of $8.50 a share. That compares with average analysts’ predictions for sales of $31.9 billion and profit of $7.96 a share.

In the first quarter, which ended on Dec. 31, the company exceeded the highest analysts’ estimates for sales and profit, and topped the most optimistic forecasts for iPhone and iPad shipments. A year earlier, the company had profit of $6 billion, or $6.43 a share.

Apple sold 15.4 million iPads, topping the 13.5 million projected by analysts. IPhone sales on average were predicted to reach 30.2 million.

“Apple’s momentum is incredibly strong, and we have some amazing new products in the pipeline,” Apple Chief Executive Officer Tim Cook said in the statement. The period was the first full quarter since Cook took over as CEO in August, when Jobs stepped down, six weeks before his death.

Mobile Versus PCs