Apple profits rise 94pc to $11.6bn, smashing expectations
APPLE’S latest profits smashed Wall Street's expectations as demand for the iPhone and iPad surged.
Profits in the first three months of the year reached $11.6bn (€8.8bn), 94pc higher than in the same quarter of last year and dwarfing the $9.4bn that analysts had forecast.
The iPad and the iPhone once again shone as Apple found new buyers of the gadgets across the world. iPhone sales soared 88pc to 35.1m, while those for the iPad more than doubled to 11.8m.
The results were enough to drive Apple shares 5pc higher in extended trading in New York.
Analysts said the performance will go a long way to ease a cluster of concerns that had seen Apple's shares fall 12pc in the past fortnight.
"Apple blows through our projections," said Brian White, an analyst at Topeka Capital Markets. "Apple fever rocks on."
International sales accounted for 64pc of the $39.2bn of revenue that Apple generated in the quarter, with chief executive Tim Cook describing the demand in China as "mind boggling". Chinese appetite for the iPhone - Apple's most profitable product - helped push the company's gross margin to 47.4pc in the quarter from 41.4pc a year earlier.
Long Apple's manufacturing base, China is now playing an increasingly central role as a source of demand as the country's middle-class expands. However, Mr Cook, who took over as chief executive from the company's co-founder, Steve Jobs, last August, sought to play down fears that Apple's iPhone may face increasing headwinds in the US.
Before the release of the results after the stock market's close, Apple's shares closed down 2pc at $560.28 as investors worried whether America's largest phone companies will continue to maintain the generous subsidies they provide to the iPhone.
"The vast majority of carriers want to provide what their customers want to buy," said Mr Cook. "iPhone is the best smartphone on the planet to entice a customer to upgrade from a regular phone to a smartphone."
Smartphones typically generate more revenue for phone companies over the course of a customer's contract.
At 7.7m, Apple sold more iPods in the quarter than forecast, but sales of Mac computers came in half a million shy of Wall Street's expectations of 4.5m.
The quarter saw Apple reduce the price of the iPad2 following the introduction of the new iPad in the middle of March. Mr Cook said that lowering the price of the older version of the iPad had seen a "marked change in demand" in certain countries but that it was too early to draw conclusions about future pricing.