By Adam Satariano - Jan 25, 2012 5:30 AM GMT+0700
Jan. 24 (Bloomberg) -- Gregg Abella, a portfolio manager at Investment Partners Asset Management, talks about the outlook for Apple Inc. He speaks with Cory Johnson on Bloomberg Television's "Bloomberg West." Emily Chang also speaks. (Source: Bloomberg)
Jan. 24 (Bloomberg) -- Gene Munster, an analyst at Piper Jaffray Cos., talks about Apple Inc.'s fiscal first-quarter profit and Yahoo! Inc.'s fourth-quarter revenue and outlook under newly appointed Chief Executive Officer Scott Thompson. Munster speaks with Emily Chang on Bloomberg Television's "Bloomberg West." Jon Erlichman also speaks. (Source: Bloomberg)
Jan. 25 (Bloomberg) -- Kenneth Schapiro, president of Condor Capital Management, talks about the outlook for Apple Inc. Apple 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. Schapiro speaks with Susan Li on Bloomberg Television's "First Up." (Source: Bloomberg)
Apple Inc. (AAPL) 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. (HPQ)’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
The results contrast with those of companies such as Microsoft Corp. (MSFT) and Intel Corp. (INTC), which are grappling with slower personal-computer sales in part because customers are choosing to buy smartphones and tablets like the iPad instead. They are trying to catch up by rolling out new mobile products, including Microsoft’s Windows 8 operating system, designed to integrate more smoothly with smartphones and tablets.
Rival smartphone makers also have struggled to keep pace with Apple. HTC Corp. (2498) and Motorola Mobility Holdings Corp. (MMI), two of the biggest companies whose devices run Google Inc. (GOOG)’s Android operating system, disappointed investors with results for their most recent quarters. Research In Motion Ltd., which has lost 90 percent of its market value since 2008, replaced its co-CEOs this week.
Apple collects more than half of the profits in the mobile- phone market, according to Horace Dediu, a former Nokia analyst who now operates the Asymco industry-research website.
Apple’s ‘Own Tune’
“Everybody else is losing market share if they compete against Apple,” said Brian Marshall, an analyst at ISI Group in San Francisco. “They are dancing to their own tune.”
Holiday iPhone demand helped Apple gain market share on manufacturers including Samsung Electronics Co. and HTC. In December, about 45 percent of U.S. shoppers who bought a smartphone in the previous three months said they purchased an iPhone, up from 25 percent in a study done two months earlier, according to Nielsen Co. Android phones were selected by 47 percent of buyers, down from 62 percent.
Competitors also haven’t been able to match the success of the iPad, with Apple controlling 62 percent of the tablet market in the third quarter, according to researcher IDC.
The popularity of the iPad and iPhone has also buoyed sales of Apple’s lineup of Mac computers. The company sold 5.2 million Macs in the first quarter, up from 4.9 million in the previous quarter.
Hewlett-Packard had revenue of $32.1 billion in its most recent quarter, which ended in October. The Palo Alto, California-based computer maker will report fiscal first-quarter results next month.
To contact the reporter on this story: Adam Satariano in San Francisco at asatariano1@bloomberg.net
To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net.
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