Apple Inc, the world’s most valuable company, trumped skeptics once again by reporting blowout iPhone sales.
Apple said it sold 35 million iPhones in the January-March quarter, almost twice as many as it sold a year ago and above analyst expectations.
Apple’s stock was down 2 percent at the close of regular trading, as investors believed phone companies had reined in iPhone sales. In extended trading, the stock rallied US$40.02, or 7.1 percent, to US$600.30.
“They’re delivering the goods much stronger than even the biggest bulls would have thought,” Topeka Capital Markets analyst Brian White said. “It’s Apple fever at its finest.”
Net income in the company’s fiscal second quarter was US$11.6 billion, or US$12.30 per share. That was nearly double the net income of US$6 billion, or US$6.40 per share, a year ago. Analysts polled by FactSet were expecting earnings of US$10.07 per share.
Revenue was US$39.2 billion, up 59 percent from a year ago. Analysts were expecting US$37 billion.
IPad sales came in below analyst expectations, at 11.8 million units, but that was still two and a half times as many as it sold in the same quarter a year ago. Apple launched a new iPad model in the quarter, and supplies are still tight. White believes short supplies of the new high-resolution screen are to blame.
Mac sales were also slightly below expectations, at 4 million. Still, that was up 7 percent from last year, outpacing overall PC market growth of about 2 percent.
Windows PC makers are now hoping Windows 8 will give them a better chance at competing with Apple, both in PCs and tablets. Intel chief executive Paul Otellini last week said he believed PCs and tablets would merge into one light device with a keyboard and a touch-sensitive screen.
Apple chief executive Tim Cook dismissed that idea on a conference call with analysts on Tuesday.
Tablets and PCs work best as separate devices, playing to their own strengths, he said.
“You can converge a toaster and a refrigerator, but those things are probably not going to be pleasing to the user,” he said.
Cook also dismissed concerns that phone companies are not satisfied subsidizing each new iPhone by hundreds of dollars and are trying to curb iPhone upgrades by their subscribers.
“IPhone is the best smartphone on the planet to entice the customer who is currently using a traditional mobile phone to upgrade to a smartphone,” Cook said. “There’s a win-win-win there.”
Analyst Abhey Lamba at Mizuho Securities agreed, saying he does not expect carriers to change their subsidies any time soon.
“IPhone is selling well because consumers want it, not because carriers are pushing it,” he said.
IPhone sales contribute to Apple’s overall revenue also rose to 58 percent. Three years ago, the figure was 27 percent.
Keeping with the trend over the past year, Asia, and in particular China, accounted for much of the revenue growth. Sales in “Greater China,” which includes Hong Kong and Taiwan, were triple those of a year ago, and accounted for 20 percent of Apple’s revenue.
For fiscal third quarter, ending in June, Apple is expecting earnings of US$8.68 per share and revenue of US$34 billion. Both figures are well below analyst expectations, but that’s usually the case with Apple’s forecasts.