Apple iPhones it in for fiscal Q3
Device is 'off to great start'; revenue, profit soarApple Inc. delivered a fiscal third quarter that handily beat expectations, and shares surged as much as 10% in after-hours trading Wednesday, partially fueled by aggressive sales goals for the iPhone.
The company reported a profit of $818 million, up from $472 million, on revenue that rose 24% to $5.41 billion.
Apple said it sold 270,000 iPhones in the first 30 hours of the product's release, then the quarter ended.
While company executives declined to disclose how many more iPhones have sold since June 30, CFO Peter Oppenheimer reiterated Apple's goal of selling 10 million by the end of 2008, helped by a fourth-quarter rollout in Europe followed by parts of Asia in 2008.
While it took Apple two years to sell 1 million iPods, the company hopes to sell that many iPhones by the end of the current quarter.
"IPhone is off to a great start," Apple CEO Steve Jobs said in a statement. He did not participate in a conference call with analysts Wednesday.
The iPhone update came a day after AT&T Inc., which has an exclusive deal with Apple to sell the product in the U.S., said it activated 146,000 iPhone subscribers in the first two days (HR 7/25).
Apple shipped 9.82 million iPods in the quarter, 21% more than the same quarter a year ago, and 1.76 million Mac computers, up a record 33%.
Also thrilling Wall Street was an increase in profit margins, which Oppenheimer partially attributed to tame commodity prices.
The company offered current-quarter guidance lower than analysts expected, though Wall Street wasn't disappointed given Apple's history of low-balling such forecasts. One analyst on Wednesday's call seemed somewhat annoyed and pressured Oppenheimer to justify the conservative guidance.
Apple said it expects to earn 65 cents per share in the quarter ending in September, while analysts are expecting 83 cents. Revenue was guided to $5.7 billion, short of the $6 billion analysts expected.
Oppenheimer said 40% of Apple's revenue for the quarter came from music — iPods, peripherals and iTunes. While Apple TV sales also are lumped into that category, analysts don't suspect that they amount to much.
Apple shares, which already are up more than 60% this year, rose 1.8% in regular trading to $137.26 and touched a high after-hours.
"We're thrilled to report the highest June quarter revenue and profit in Apple's history, along with the highest quarterly Mac sales ever," Jobs said.