Apple crushes Street forecasts, iPad backlogged

By @ibtimes on

Apple Inc's quarterly results again smashed Wall Street's expectations, fueled by record iPhone and Mac sales, offsetting lower-than-expected sales of its iPad tablet computer.

The world's most valuable technology corporation said a record 18.65 million units of the category-defining iPhone -- its flagship product -- moved in the March quarter, outpacing the 16 million or so expected.

It moved just 4.69 million iPads -- which command an 80 percent share of a burgeoning tablet market in which Motorola Inc and Samsung Electronics also compete -- but analysts said that would not detract from strong long-term demand.

The stellar results came as concern is growing over how component supply constraints after Japan's earthquake and tsunami would squeeze margins and restrain iPhone and iPad sales in coming months.

Dynamite numbers across the board. The only hiccup is lower than expected iPad numbers, said Capital Advisors Growth Fund portfolio manager Channing Smith.

We can attribute some of the weakness to stocking issues at some of the retail outlets and obviously the supply chain issue in Japan. Unfortunately, the supply chain issue will likely persist for the coming months but once we get past summer and the supply chain issues are resolved it's all systems go again for Apple.

IPAD SALES MISS TARGETS

Apple's iPad sales in the quarter fell well short of Wall Street's expectations: some analysts had projected shipments of closer to or even more than 6 million for the tablet computer launched on March 11.

But the lower-than-expected number could be attributed to the fact that Apple recognizes revenue from its stores when its customers receive the products. The initial wait time for the iPad 2 was four to five weeks.

Apple's results come as it prepares to build the next iPhone model with a faster processor, which will begin shipping in September, three people with direct knowledge of the company's supply chain said on Wednesday.

It reported a net profit of $5.99 billion, or $6.40 a share, while revenue surged 83 percent to $24.67 billion. That surpassed expectations for $5.37 in earnings and $23.4 billion of revenue.

A large spike in sales of Mac computers, driven by the refreshed MacBook Pro, beefed up March-quarter earnings. Apple said it sold 3.76 million Macs, up 28 percent from a year ago.

It also sold 18.65 million of the high-margin iPhones, which is the technology company's most important product line.

Gross margins in the fiscal second quarter came to 41.4 percent, above Wall Street's average forecast of 39.03 percent.

Apple, which generally provides an ultra-conservative forecast, said it expected June quarter earnings of $5.03 a share on revenue of about $23 billion.

(Editing by Edwin Chan and Richard Chang)

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