Apple posts record 3Q revenue
$3.3 bil profit up from $1.8 bil in same quarter last yearApple sold a record number of Mac computers and posted record revenue in its fiscal third quarter, but its conference call with analysts Tuesday focused largely on its hot multimedia tablet device, the iPad.
The tech-media giant beat analyst expectations on almost every front when it disclosed its earnings, though it sold fewer iPhones in the quarter than many had predicted it would.
In after-hours trading the stock was up, then down, flat and up again as investors pored over every detail of Apple's report looking for clues about the company's near future and whether they might glean from the results of a single company the direction of the country's overall economy.
Apple posted a quarterly profit of $3.3 billion, up from $1.8 billion in the same quarter last year on revenue that jumped 61% to $15.7 billion.
Apple sold 3.5 million Macs, up 33%; 8.4 million iPhones, up 61%; 9.4 million iPods, down 8%; and 3.3 million iPads. The iPads were released during the quarter and were expected to slightly cannibalize the iPod sales, just as iPhones have been.
Apple shares were up 3% to $251.89 during the regular session and up another 3% after the closing bell. The company's market capitalization on Tuesday topped $229 billion, more than the combined worth of Disney, Time Warner, Viacom, CBS, News Corp. and Sony.
Apple said revenue in the current quarter should be $18 billion, about $1 billion higher than the guidance Wall Street was expecting.
Revenue from Apple's iTunes music and video store, including related accessories, was up 27% in the fiscal third quarter to $1.2 billion.
Apple COO Tim Cook said the company was selling iPad and iPhone 4 units as fast as they can make them, even though there were some minor technological issues with the iPhone 4 that Apple has set aside $175 million to fix.
Answering a question posed by a Wall Street analyst, Cook said Apple was not trying to "create buzz" by purposely undershipping iPads to give a false impression of the level of demand.
He said Apple planned to sell 1 million iPads a month during the quarter and sales have simply exceeded that estimation. "We're increasing capacity as quickly as we can," he said.
He also said that he thinks iPad sales won't falter when demand from early adopters runs its course because the iPad has already moved beyond that stage, and it has done it quicker than any other product he's ever seen.
Cook called it "jaw-dropping" that the company sold a record number of Macs in the same quarter that it sold 3.3 million iPads, because there was speculation that the iPads would cannibalize the Mac. Instead, Cook theorized about a "halo effect," whereby consumers who get hooked on the iPad then purchase their first Mac computer, similar to the effect that iPods had on Macs.
Cook also said that 50% of Fortune 100 companies are already using or testing the iPad for business purposes, a statistic he called "incredible."