Apple posts $28B quarter, announces Lion launch

Apple today once again surpassed estimates, posting record revenues for its most recent fiscal quarter and beating expectations in sales of its products across the board. The company also announced that it will launch the next version of Mac OS X tomorrow.

Apple reported a profit of $7.31 billion, or $7.79 per share, for the quarter ending June 19. That's more than double what the company reported at the same time last year.

Revenue for the quarter was $28.57 billion, up nearly 82 percent from the same quarter a year ago, and another record for the Cupertino, Calif.-based tech giant. The performance was $1.99 per share above the average estimate among analysts surveyed by Thompson Reuters' First Call, which pegged revenue at $24.92 billion, or $5.80 per share.

The company posted a gross margin of 41.7 percent, up 1.6 percent from the same quarter last year.

"We're thrilled to deliver our best quarter ever, with revenue up 82 percent and profits up 125 percent," Apple CEO Steve Jobs said in a statement. "Right now, we're very focused and excited about bringing iOS 5 and iCloud to our users this fall."

In a conference call after the announcement, Apple said it wasn't yet ready to give a launch date for iOS 5, which it previewed last month. It said iCloud would launch sometime in the fall but did not give a release date for that, either.

Apple sold 20.34 million iPhones during the quarter, up strongly from an average analyst estimate poll by Fortune of 16.9 million units and representing a 142 percent increase from the same quarter last year. That's also up from the 18.65 million iPhones Apple sold in its second fiscal quarter earlier this year. In a Q&A period during a conference call this afternoon, Apple COO Tim Cook credited that largely to expansion into emerging markets such as China, Latin America, and the Middle East.

This was the first full quarter that Apple's iPad 2 was on sale. The company sold 9.25 million iPads during the quarter. Apple's previous quarterly earnings, which tallied sales of 4.69 million iPads, accounted for just two weeks of sales that included the newer model, which went on sale in early March. During the call, Cook noted that the company had reached supply-demand equilibrium for a number of iPad models in certain markets, though he would not say which ones.

As for Macs, Apple said it sold 3.95 million computers during the third quarter, up from the record-setting 3.47 million Macs the company sold during the same quarter last year. As for why those numbers weren't higher, there was likely some cannibalization of its Mac business due to the iPad, Cook said.

"We do believe that some customers chose to purchase an iPad instead of a new Mac during the quarter," Cook said. "But even more customers chose to buy an iPad over a Windows PC. As I've said before, there's a lot more of the PC Windows business to cannibalize than the Mac."

Cook also said some consumers have been holding off on purchasing a new Mac until Lion is released. Since announcing the upcoming $29.99 OS update last month, Apple has offered new Mac buyers a free upgrade when the software arrives tomorrow.

iPod sales continued their decline, with Apple selling 7.54 million units, down 20 percent from the 9.41 million units sold during the same quarter last year.

All told, Apple said international sales accounted for 62 percent of the company's quarterly revenue. The highest of those segments was Europe, followed by Asia-Pacific and Japan.

Apple Chief Financial Officer Peter Oppenheimer, who gave guidance for the next quarter, expects $25 billion in revenue and projected earnings of $5.50 per share, a conservative estimate compared to Wall Street's $6.36 consensus.

Shares of Apple's stock were trading at $396.70 in after-hours trading, up $19.65, or 5.25 percent.

While Apple didn't mention Apple TV in its earnings report, it did comment about the product in its earnings call.

"Apple TV continues to do well, but I don't want to mislead," Cook said. "We still call it a hobby here. We do that because we don't want anyone to conclude that it's another leg of the stool. It's just not in the same market as the iPhone, iPad, or iPod. Our customers love the product. We got it right when we went to the new Apple TV in the fall, but it's still in the hobby status. [However,] we continue to invest in it because we think there's value there. "

Editor's note: This story has been updated throughout with comments and details from the conference call held by Apple late this afternoon.

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