Whopping iPhone sales propel Apple's quarter
The company beats expectations on revenue and profit.
Apple (AAPL) is back to its pattern of blowing away analyst estimates.
The company beat Wall Street expectations Tuesday for the December quarter, reporting record profit of $13.06 billion, or $13.87 a share, up from a profit of $6 billion, or $6.43 a share, a year earlier. Revenue was a record $46.33 billion, up from $26.74 billion a year earlier.
Analysts had expected $10.14 a share in profit on revenue of $39.1 billion for the quarter ended Dec. 31. Shares were up about 6% Wednesday.
It was the first quarter to include results from Apple's new iPhone 4S, which went on sale in October. Verizon (VZ) already gave investors a hint about what to expect Tuesday when it said that 4.3 million of the 7.7 million smartphones it sold in the fourth quarter were iPhones.
Apple sold 37 million iPhones in the quarter, handily beating the 29 million to 32 million Wall Street had expected. In a conference call, CEO Tim Cook said the company made a bold bet on iPhone demand heading into the quarter but ended up short on supply throughout the period.
"As it turns out, we didn't bet high enough," he said.
Watch a discussion about Apple's earnings in the following video.
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The quarter also helped answer some questions about how Apple's iPad fared against its first true competitive threat: the Kindle Fire from Amazon (AMZN). Apple sold 15.4 million iPads -- far more than what even the most enthusiastic analysts expected.
Amazon likely sold between 4 million and 5 million Kindle Fires in the holiday quarter, raising questions about whether that hurt iPad sales.
In the conference call, Cook didn't specifically name the Kindle Fire, but he said the iPad is more advanced than other tablets on the market.
"I think people really want to do multiple things with their tablets, and therefore we don't really see these limited-function tablets and e-readers being in the same category," he said. "I don't think that people that want an iPad will settle for a limited function."
Mac sales continued to march forward, rising 26% from a year earlier to 5.2 million units sold. The growth is especially significant compared with the sluggish sales seen in the overall PC industry. The Gartner research company reported a 1.4% decline in global PC sales in the fourth quarter on weak consumer demand.
Apple said the number of iPods sold fell by 21% to 15.4 million. But those sales were still ahead of the company's expectations.
The quarter was a turnaround from Apple's last earnings report, a rare miss for both earnings and revenue as people delayed iPhone purchases. Bloomberg noted that this quarter was the first time Apple's revenue beat Hewlett-Packard's (HPQ) -- a milestone of sorts as the PC industry finds itself in a breathtaking overhaul.
For the current quarter, Apple said it expects revenue of about $32.5 billion and profit per share at about $8.50.
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