Apple reports blockbuster earnings with iPhone growth increasing by 123%

Apple today announced its earnings for its most recent quarter, and reported earnings of $1.33 a share on revenue of $8.16 Billion. Put another way, that's $1.21 Billion in profits. The general consensus among analysts hinted at an EPS of $1.08 a share on revenue of $8 Billion. Last year during the same quarter, Apple reported earnings of $1.16 a share on revenue of $7.51 Billion. In a press release issued today, Apple CFO Peter Oppenheimer noted:

"We are extremely pleased to report the best non-holiday quarter revenue and earnings in our history. Apple’s financial condition remains very robust, with almost $29 billion in cash and marketable securities on our balance sheet."

In accordance with expectations, Apple reported 2.2 million Mac sales which represents a 3% decline from the same quarter a year-ago. iPhone and iPod sales figures were slightly higher than expected, with 11.01 million iPods sold and 3.79 million iPhones sold. In its press release, Apple pointed out that iPhone sales for the past quarter represent a 123% increase in unit growth from the same quarter a year-ago. Of course, last year's quarter didn't have the benefit of the iPhone 3G or the immensely popular iTunes App Store. Still, the increase is staggering. Apple's better than expected earnings were largely the result of higher than anticipated gross margins, which came in at 36.4% for the quarter, up from 32.9% during the same quarter a year-ago. This helps explain why analysts were fairly accurate in their revenue estimates, but way off base when it came to their EPS estimates. Apple COO Tim Cook noted that higher gross margins were largely the result of extremely strong iLife '09 and iWork '09 sales. Apple's earnings report should be a welcome surprise for investors, who have recently become bearish on the stock in light of surrounding economic conditions. Looking forward to the next quarter, Apple once again provided a range of guidance, and anticipates earnings to fall anywhere between $0.95 and $1.00 a share on revenue between 7.7 and $7.9 Billion. Here are some of the more interesting points from Apple's earnings conference call: - iPod sales were up 3% from the same quarter a year-ago - The iPhone is now available in 81 countries - The iTunes App Store now boasts over 35,000 applications - The iTunes App Store is within hours of reaching its Billionth download - Half of all Macs sold at Apple Stores were to first time Mac owners - 16% increase in Apple Store foot traffic with over 39 Million visitors - Apple is sitting on 28.9 Billion in cash - The total number of iPhones and iPod Touch's comes in at 37 million units - Extremely strong iTunes growth in terms of downloaded music, movies, and applications - Echoing statements made during its last earnings conference call, Cook noted that Apple will not create a price umbrella for iPhone competitors Netbooks? Not any time soon During a Q&A session, the issue of netbooks was brought up. Not surprisingly, Apple COO Tim Cook responded by pointing out many of the shortcomings of netbooks such as their small screens, cramped keyboards, and shoddy software. Cook went on to say that if consumers are looking for a portable device with which to check their email and browse the web, that the iPod Touch is an attractive option. As expected, Cook finished by saying that Apple has some "interesting ideas" when it comes to netbooks, but that they are still not interested in entering that particular market segment. iPhone exclusivity to AT&T When asked about keeping the iPhone exclusive to AT&T, Tim Cook said that Apple is very happy with AT&T and that they are focused on making one phone capable of working worldwide. That, of course, currently rules out Verizon's CDMA network which doesn't have a significant presence outside of North America. Verizon plans to roll out its 4G network in 2010, and that's probably the earliest we'd see the iPhone on another carrier. Meanwhile, AT&T is reportedly in negotiations with Apple to extend its exclusivity contract to sell the iPhone until 2011 as AT&T and Apple's current deal is largely believed to run through 2010. Steve Jobs It's hard to get through an Apple event without someone bringing up Steve Jobs, and this was no exception. When prodded about Jobs', Cook stated that Jobs is still planning on returning to the CEO position at Apple in June.

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