Apple Reports 2nd Quarter Results: $11.6B In Profit, 35.1M iPhones Sold

NEW YORK | Tuesday, April 24th, 2012 9:47pm EDT

Apple Inc’s quarterly results beat Wall Street estimates on stronger-than-expected demand for the iPhone 4 and 4S, especially in China where sales jumped five-fold.

Apple Reports Second Quarter Results 01

Despite the gloom surrounding its stock price of late, Apple delivered another blowout quarter on Tuesday, thanks in large part to iPhone sales. Photo: MaxVT/Flickr

Apple Inc. saw $39.2 billion in revenue and a net profit of $11.6 billion, or $12.30 per diluted share,  according to the company’s press release.

Apple sold 35.1 million iPhones this quarter (an 88 percent increase from the same quarter last year) and 11.8 million iPads (a 151 percent increase). Customers bought four million Mac units and 7.7 million iPods, reports The Huff Post.

However, analysts had predicted that Apple would sell 30 million iPhones, 12 million iPads and between 4.1 million and 4.4 million Macs during the quarter.

“We’re thrilled with sales of over 35 million iPhones and almost 12 million iPads in the March quarter,” said Tim Cook, Apple’s CEO. “The new iPad is off to a great start, and across the year you’re going to see a lot more of the kind of innovation that only Apple can deliver.”

“Our record March quarter results drove $14 billion in cash flow from operations,” said Peter Oppenheimer, Apple’s CFO. “Looking ahead to the third fiscal quarter, we expect revenue of about $34 billion and diluted earnings per share of about $8.68.”

Reuters reports that some investors had feared intensifying competition from Google Inc’s Android phones might pressure margins and eat into its market share.

“That shows they are able to maintain their pricing without compromising on growth,” said Morningstar analyst Michael Holt.

“There are lower-priced alternatives from the Android world that are becoming more compelling. The concern was that Apple might sell more older models to be more competitive. That would have shown up in the gross margin. But aggregate gross margin and average revenue per device show that this hasn’t happened,” he sad.

Apple soundly exceeded the Q2 guidance they offered last quarter, as they forecasted earnings per share of $8.50 on $32.5 billion in revenues, according to TechCrunch.

In comparison, those figures are up substantially year over year — in Q2 2011, Apple pulled in $6 billion in profit on $24.7 billion in revenues. Apple sold just 11.8 million iPads compared with the average forecast of up to 13 million.

“There’s no doubt looking in the last quarter and the Christmas season, Apple has executed very well. But you are starting to see the iPad … reach some sort of saturation with the current product,” said Patrick Becker, a principal at Becker Capital Management, which does not own Apple shares.

“These are the transitions you start to have without coming out with a brand new device. They have been extremely successful at bringing out new categories and it is new products that will drive up the stock price.”

Last quarter’s results, which included earnings and sales from the holiday shopping season, were a little bit stronger. Apple reported $46.33 billion in revenue and a net profit of $13.06 billion ($13.87 per diluted share).

Customers bought a total of 37.04 million iPhones, 15.43 million iPads, 5.2 million Macs and 15.4 million iPods in the previous quarter.

Apple’s strong results came after a 13 percent decline in its shares over the past couple of weeks in unusually volatile trading, as investors fretted over potential competitive and pricing pressures.

As for patent litigation battles with rivals, Tim Cook said he preferred to settle if Apple could get a fair settlement. The company is currently fighting court battles with Android phone makers, including Samsung, HTC Corp and Motorola in the United States and other countries.

Apple will provide live streaming of its Q2 2012 financial results conference call at 2:00 p.m. PDT on April 24, 2012 at www.apple.com/quicktime/qtv/earningsq212. This webcast will also be available for replay for two weeks thereafter.

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