Apple nearly doubles net profit as iPhone sales soar

Written by Bloomberg | Updated: Apr 26 2012, 06:37am hrs
Apple profit almost doubled last quarter, reflecting robust demand for the iPhone in China and purchases of a new version of the iPad, allaying the growth concerns that sliced shares 12% in two weeks.

Net income in the fiscal second quarter climbed 94% to $11.6 billion, or $12.30 a share, as sales rose 59% to $39.2 billion, Apple said on Wednesday. Analysts had predicted profit of $10.02 a share on revenue of $36.9 billion, data compiled by Bloomberg show.

Chief executive officer Tim Cook is relying more on regions outside the US for sales growth. Apple sold 35.1 million iPhones in the period after releasing the latest model in China and 21 other countries in January. That helped make up for sales declines from the previous quarter at the top US mobile-phone carriers, Verizon Wireless and AT&T. It also quelled speculation that Apples growth pace may slacken.

This report should erase any doubt in investors minds that this company cant continue to deliver, said Jack Ablin, chief investment officer of Harris Private Bank in Chicago, which oversees about $60 billion, including Apple shares. Its astounding.

Apple rose as much as 7.8% to $604.22 in extended trading, after having dipped 2% to $560.28 at the close in New York.

The company sold 11.8 million units of the iPad, which was updated last month to include a high-definition screen and faster processor. Apple has sold 67 million iPads since their debuted in 2010. It took the company 24 years to reach that milestone with the Mac computer, Cook told analysts.

Analysts surveyed by Bloomberg on average predicted Apple would sell 11.9 million iPads and 31.2 million iPhones.

The companys shares had tumbled $75.95 since a record close of $636.23 on April 9 amid reports that indicated a possible shortage in key components for its mobile devices and showed a decline in iPhone sales at wireless carriers. Some traders also took cues from so-called technical indicators that use historical trends to predict stock movements.

The results released on Wednesday add to evidence of a rebound in some pockets of the economy, lifting results for other technology bellwethers. Microsoft, the top software maker, last week reported better-than-expected corporate purchases of computers, while Texas Instruments, the biggest maker of analog chips, on Tuesday indicated robust demand for a range of electronics. International Business Machines, the worlds biggest computer-services provider, also reported higher profit.

For Apple, China has made up a growing slice of results since the introduction of the iPhone there in 2009. The most populous country accounted for $7.9 billion of revenue, 20% of the total, Cook said on the call with analysts. Thats three times the level for a year earlier, Cook said.

China has been a very fast-growing region for them, said Abhey Lamba, an analyst at Mizuho Securities USA in New York. Theres more disposable income, strong demand for high-end products and their penetration has been very low in that market. They have been highlighting that region as one of their focus areas.