Computer and Mobile Sales Lift Apple Net 78%

Computer and Mobile Sales Lift Apple Net 78%
By MIGUEL HELFT
Copyright by The New York Times
Published: July 20, 2010
http://www.nytimes.com/2010/07/21/technology/21apple.html?_r=1&hp


SAN FRANCISCO — The iPhone 4 antenna may be causing static for some Apple investors, but the electronics giant continues to grow faster than most rivals.

Apple said that its net income rose to $3.25 billion, or $3.51 a share, a 78 percent jump from a year earlier, in the third quarter, which ended on June 30. Revenue rose 61 percent, to $15.7 billion, from $9.73 billion a year ago, bolstered by strong sales of Apple’s computers and mobile devices.

The results beat Wall Street expectations, which have risen in recent days. On average, analysts expected Apple to report net income of $3.12 a share on revenue of $14.75 billion.

“It was a phenomenal quarter that exceeded our expectations all around, including the most successful product launch in Apple’s history with iPhone 4,” Steven P. Jobs, Apple’s chief executive, said in a news release. “IPad is off to a terrific start, more people are buying Macs than ever before, and we have amazing new products still to come this year.”

In the first quarter since the iPad went on sale, Apple said that it sold 3.27 million of the device. The number was largely expected because Apple said shortly before the end of the quarter that it had sold more than three million of the tablet-style computers.

Investors, however, were watching for the impact of the blockbuster product on Apple’s profit margins as the company warned earlier that the iPad’s margins would be lower than those of products like the iPhone.

Over all, Apple’s gross margin was 39.1 in the most recent quarter, down from 40.9. percent in the previous year.

During the three months ended on June 30, Apple sold 8.4 million iPhones. Most of those were iPhone 3GS units, as the iPhone 4 went on sale on June 24, just a week before the end of the quarter.

Apple said that sales of the Mac computer continued to gather momentum during the quarter. The company sold 3.47 million, a record, and a 33 percent increase from a year earlier.

“It is still one of the best growth stories in tech,” said Shaw Wu, an analyst with Kaufman Brothers.

Shares of Apple have fallen nearly 9 percent since the introduction of the iPhone 4 before rebounding 2.5 percent on Tuesday, to close at $251.89. Apple released its financial results after the close of regular trading, and shares rose more than 3 percent in after-hours trading.

The problems surrounding the iPhone 4’s antenna reception have dominated the headlines in recent weeks. Shortly after the release of the device, users began to complain of weak reception and dropped calls when they touched the lower left portion of the antenna, which is built into a steel band that encases the phone.

On Friday, Apple gave its most detailed and forceful defense of the iPhone 4’s ability to receive and hold calls. In a news conference at Apple’s headquarters in Cupertino, Calif., Mr. Jobs said the reception problems were common ones that plague most other smartphones, an assertion that several competitors rejected.

Mr. Jobs also said that the problems with the iPhone 4 antenna had been blown out of proportion by the media. But to end the controversy, he said that Apple would offer free bumpers to all iPhone 4 customers.

The bumpers, which insulate the antenna from human touch, solve the reception problems. Analysts said that the cost of providing the free bumpers would have minimal impact on Apple’s earnings.