Apple earnings soar, 1.4 million iPhones sold to date

As expected, it was another great quarter for Apple, with Mac shipments leading the way as the company sold more than a million iPhones.

UPDATED 3:42 p.m.--Added a few more details, numbers, and statements from Apple executives from the conference call.

Apple reported another stellar quarter Monday, exceeding estimates in just about every facet of its business.

For the company's fourth fiscal quarter, which ended September 29, the company reported revenue of $6.22 billion and profit of $904 million, or $1.01 in earnings per share. Wall Street analysts had expected Apple to report revenue of $6.1 billion and earnings per share of 86 cents, according to estimates compiled by Thomson Financial.

Apple has now sold 1.39 million iPhones, and 1.1 million during the quarter, the company reported. Mac shipments were up 34 percent compared to last year, and iPod shipments were up 17 percent.

That iPhone price cut, however controversial among the early adopters, seemed to do the trick. As of September 10 , Apple said it had sold 1 million iPhones in total. So after the price was cut from $599 to $399, and the $499 4GB iPhone disappeared, Apple sold almost 400,000 iPhones in 18 days, or more than a quarter of all the iPhones sold to date.

Tim Cook, Apple's chief operating officer, confirmed the company expects to sell 10 million iPhones in the calendar year of 2008, but he didn't set a target for iPhones sales during the holiday quarter. It took Apple 2 years to sell around 1.4 million iPods sales in the early days of that product, he said.

It's also clear that Apple is gaining share on the rest of the PC industry. Last week IDC and Gartner had the worldwide PC market growing at around 15 percent, while Mac shipments are growing more than twice as fast. Apple sold 2.1 million Macs during the quarter, a company record and 400,000 units better than its previous best.

Students helped account for the surge in Mac shipments, during a quarter that Cook called "the most successful back-to-school season we've ever had." Apple introduced new iMacs in August, but it also ran a promotion for students that bundled a free iPod along with the sale of a new notebook.

That might have had something to do with the fact that iPod shipments were actually lower than some Wall Street analysts had anticipated. Shaw Wu of American Technology Research had expected Apple to sell 11 million iPods, but the company shipped a total of 10.2 million units. That was actually right in line, however, with a prediction from Piper Jaffray's Gene Munster, who cited an average analyst estimate of 10.9 million units.

Going into the holiday season, Apple expects to record $9.2 billion in revenue and earnings per share of $1.42, the company said. That's higher than what financial analysts were expecting for Apple's first fiscal quarter, a twist for a company that usually provides conservative guidance.

The holiday quarter is usually huge for the iPod division; last year Apple sold 21 million iPods during its first fiscal quarter. And the new iPods that were introduced during in September didn't really have much time to make an impact on the results announced Monday.

Mac shipments are usually flat during the company's first fiscal quarter compared to the back-to-school totals as educational buyers drop off and holiday buying kicks in, said Apple CFO Peter Oppenheimer. When asked to look ahead to the current quarter, he seemed somewhat pessimistic that Apple could duplicate the amazing growth it showed during its fourth quarter. Cook, however, noted that Apple saw strong growth in Europe during the past quarter.

About the author

    Tom Krazit writes about the ever-expanding world of Google, as the most prominent company on the Internet defends its search juggernaut while expanding into nearly anything it thinks possible. He has previously written about Apple, the traditional PC industry, and chip companies. E-mail Tom.

     

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