Great iPhone Sales Saves iPad’s Backlog – Stock Up

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Apr 21 2011
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Another quarter and another outrages earnings from Apple. Seriously the authorities have to do something about this earnings guidance thingy. Apple has been making fun of earnings game by deliberately giving lower guidance since the dinosaurs were wiped out from this planet only to announce better than expected results. Not that I complain (*tongue in cheek*) about the stock’s gap-up after their quarterly earnings announcement but over time the gap-up is getting smaller and weaker and it’s no fun that you can’t make historical profits anymore.

Apple Inc. (Nasdaq: AAPL, stock) just announced another mind-boggling quarterly earnings with profit nearly doubled as consumers continued to snap up its iPhone and iEverything. Here’re the latest earnings statistics:

  • Profit: $5.99 billion (up 95%)
  • Earnings per share: $6.40 vs expectation of $5.37
  • Revenue: $24.67 billion (up 83%) vs expectation of $23.4 billion
  • Gross Margin: 41.4% from 38.5%
  • iPhone Sales: 18.65 million units vs Wall Street estimate of 16.5 million units- interestingly this is 15% higher than the holiday seasn December quarter, which is typically Apple’s strongest period
  • iPad Sales: 4.7 million units vs market consensus of 6.2 million units
  • iPod Sales: 9.02 million units (down 17%)
  • Mac Sales: 3.8 million computers (up 28%) vs market consensus of 3.6 million computers
  • Cumulative iOS operating system sales: 189 million devices
  • Forecast earnings for current quarter: EPS $5.03 on Revenue of $23 billion vs market expectation of $5.26 per share on $23.9 billion revenue

 Apple AAPL Stock Price Extended Trading Hour

During the conference call with analysts, Apple COO Tim Cook said iPhone sales in the U.S. rose 155% while in China it was at staggering 250%, crunching IDC’s estimate that smartphone growth would only be around 48% for the quarter. Although the sales of iPad was lower than expecation, the stock wasn’t punished as can be seen when the share prices gap-up higher at extended trading hour. Analysts generally agreed this was due to supply constraints rather than supply issue.

Instead, analysts were eager to find out when Apple could ramp up production. Tim Cook proudly acknowledging the iPad supply problem calling it “the mother of all backlogs” but nevertheless refused to reveal more information about current quarter’s production. Fortunately, Cook said the earthquake and tsunami in Japan didn’t affect Apple’s supply or cost impact, but added he’s not sure whether there will be another shortage of iPads.

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