Apple Inc. posted its best quarter ever in terms of quarterly revenues and earnings. Quarterly revenues were up 32% to $15.68B and quarterly net income increased over 50% to $3.38B, assisted by a record operating margin of 30.1% for the quarter. Earnings per share were $3.67 per share, which beat a consensus estimate of $2.08 per share by $1.59 and likewise topped their own guidance of $1.70 to $1.78 per share. This represents earnings per share growth of 46.8% year-over-year. Cash and marketable securities increased by $5.8B from $34B to $39.8B. Apple shares rose by as much as $5.26 to $208.33 in afterhours trading after their earnings release, an increase of 2.58%. This represents a gain of about 117% on UASBIG’s original position.
Quarterly records for Mac and iPhone sales were set for the quarter. Mac sales increased by 33% year-over-year nearly double the 17% growth for the market estimated by the IDC for the same quarter, while Apple sold over 8.7 million iPhones for the quarter, an increase of over 100% versus an estimated 35% growth estimate for the smartphone industry made by Canalys. 17 new carriers were added and there is now iPhone distribution in 86 different countries.
Unit sales of music players decreased from 22.7 to 21 million units year-over-year, but strong demand for the higher priced iPod Touch products boosted sale revenues by 1%. Apple still maintains a commanding 70% market share for United States MP3 players.
Apple continues to exceed analyst beat expectations, although the record numbers are not incredibly surprising given the new revenue recognition accounting changes that were approved by FASB in the latter end of 2009. These changes allow Apple to recognize sales of iPhones and Apple TV immediately, rather than on a subscription basis spread over a 24-month period. The intensity of the smartphone industry is increasing with the emergence of Google-based phones such as the Motorola Droid and the Google Nexus One, but neither is at quite the same level and they are merely serving as substitutes to the iPhone on non-AT&T carriers. Going forward, UASBIG has a tentative price target of $235, subject to the new product launch at 1PM this Wednesday and any divergence from the single wireless carrier model in the United States.
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