Strong iPhone sales send Apple profits soaring

9:33 PM Apple, iPhone, profits, sales, Soaring, Strong No Comments

CNBC's Jon Fortt listened into Apple's earnings call and shares highlights.

By Bill Briggs, msnbc.com contributor
Apple’s market muscle held firm Tuesday as the company — bolstered by thriving sales in Asia — surpassed analysts’ estimates and set second-quarter records in its sales of iPhones, iPads and Macs.

The tech titan posted quarterly revenue of $39.2 billion — second only to its all-time, quarterly revenue record of $46.33 billion, which it reported last December.

For the March quarter, Apple reported a net profit of $11.6 billion — or $12.30 per diluted share. A consensus estimate previously gathered by Thomson Reuters had predicted Apple would post quarterly revenue of $38.9 billion and $10.10 per share.

“We are very pleased,” Apple’s Chief Financial Officer Peter Oppenheimer said during a conference call. He dubbed the company’s second-quarter performance “outstanding.”

During the same quarter in 2011, Apple posted earnings of about $6 billion or $6.40 a share on revenue of $24.7 billion.

International sales accounted for 64 percent of the quarter’s revenue.

Apple shares, which have been under pressure in recent weeks after hitting record levels, jumped in after-hours trading.

Apple said it sold 35.1 million iPhones in the quarter — an 88 percent spike from the same period in 2011. That surge was “led by our Asia-Pacific and Japan segments, where sales more than doubled year over year,” Oppenheimer said. Compared to the same period last year, iPhone sales were five times higher in China, helped by the launch of the iPhone 4S in that market.

Additionally, Apple sold 11.8 million iPads (up 151 percent from last year’s quarter) and 4 million Macs, a 7 percent rise compared to 2011’s second quarter, establishing new March-quarter records for both desk-tops and portables.

Oppenheimer pointed to the “education market” for its recent iPad success, saying that during the second quarter the company sold more than two iPads for every Mac “to our U.S. K-12 customers.”

The only slide for Apple came in its iPod division. The company sold 7.7 million units during the second quarter, a 15 percent decline from the same period in 2011.

“Our record March quarter results drove $14 billion in cash flow from operations,” Oppenheimer added. “Looking ahead to the third fiscal quarter, we expect revenue of about $34 billion and diluted earnings per share of about $8.68.”

Leading up to Apple's announcement, made just after the closing bell, markets were jumpy given Apple’s massive footprint on the American financial landscape. Apple took some lumps, closing at $560.29 per share, down $11.41 or 2 percent.

But buoyed by the better-than-expected revenue and sales news, Apple’s shares rallied by 7 percent in after-market trading, recapturing nearly 50 percent of the correction the company experienced since its April highs, said Mark Newton, chief technical analyst at Greywolf E.P.

Newton further forecast “a bullish reversal by Friday, allowing for a likely retest of April highs in the weeks ahead.”

“Although (Apple) has shown above-average underperformance in the last few weeks, this was purely a short-term pullback as part of an overall uptrend,” Newton said. “And there hasn’t been sufficient weekly technical damage to turn overly negative on the shares."

Newton said, however, that “concerns remain” among investors about the “overall equity market” spanning the next four to six months.

But he added: “My feeling is that Apple should continue to show good technical relative strength versus the overall market and will require far greater signs of deterioration to warrant any type of cautious stance.”

At this stage, Newton foresees “an outside shot” at the company’s share price reaching $700 to $750 “before any additional weakness happens into the summer and fall months.”