Apple (NASDAQ: AAPL) sold a record number of iPhones in its most recent quarter, and reported strong increases in profits and revenue--results that topped most analyst expectations. Apple sold 8.75 million iPhones in the quarter, representing a 131 percent increase from the 3.79 million it sold in the year-ago quarter, and slightly higher than the 8.7 million it sold in the last quarter.
The Cupertino, Calif.-based company reported net profit of $3.7 billion, surging up 90 percent from $1.62 billion in the year-ago period. Apple posted revenue of $13.5 billion, up 49 percent from $9.8 billion in the year-ago period. The computer and smartphone maker's gross margin was 41.7 percent, up from 39.9 percent in the year-ago quarter.
In January, Apple adopted new accounting standards that will allow it to claim revenues from iPhone sales when the units sell, rather than spacing revenues out over the lifespan of the device--24 months--as had been previously required. The firm said it is revising every quarter in its earnings since it began selling the original iPhone because it "believes retrospective adoption provides analysts and investors the most comparable and useful financial information and better reflects the underlying performance" of its business. The company reported $5.4 billion in revenue from sales of iPhones and related products and services in the quarter, an increase of 124 percent from the year-ago quarter.
Apple's stock jumped around 6 percent, to around $260 per share, following the release of its quarterly financial results.
During the company's quarterly conference call, Apple executives addressed a few hot-button issues. On a question about the performance of AT&T Mobility's (NYSE: T) network, Apple CFO Peter Oppenheimer said, "I think they continue to work very, very hard and we look forward to continued improvement. They clearly made big strides in some areas with some of the recent surveys have pointed out and I think it will continue," according to a conference call transcript provided by SeekingAlpha.
As to whether Apple will expand distribution of its iPhone beyond AT&T, which to date has been the sole provider of the device in the United States, Apple's Timothy Cook hedged: "Over the past year we have moved a number of markets from exclusive to non-exclusive. In each case as we have done that we have seen our unit growth accelerate and our market share improve. But that doesn't mean we view that formula works in every single case. I would just sort of reiterate what I did last time that this is how we are learning so far. That is the result we have seen so far. We think very carefully about each of these at the country level to conclude what is in our best interest."
Although Apple has expanded iPhone distribution from one carrier to several in a number of markets, including the United Kingdom, it continues to rely on exclusive arrangements with a single carrier in the United States, Germany and Spain.
Apple's earnings announcement caps a particularly interesting week for the company. Apple has been embroiled in a blizzard of speculation during the past few days after photos surfaced of a device that the blog Gizmodo said is the next version of the company's iPhone. Apple has requested that the device be returned.
Although Apple has not made any official announcement about the next iPhone, it is widely expected the company will unveil the latest version of the device in June, as it has done in the past. In a statement released touting the company's earnings, Apple CEO Steve Jobs said only: "We have several more extraordinary products in the pipeline for this year."
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