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1/26/2010
08:17 AM
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Apple Profits Up 50%

Mac sales jumped 33% from a year ago, and iPhone sales showed 100% unit growth.

Apple's profit rose by 50% in the fiscal first quarter, as Mac and iPhone sales surged in the U.S. and many other countries.

The company said Monday that profit for the quarter ended Dec. 9 increased to $3.38 billion, or $3.67 a share, compared to $2.26 billion, or $2.50 a share, for the same period a year ago. Revenue rose to $15.68 billion from $11.88 billion and gross margin rose to 40.9% from 37.9%.

Apple's results beat Wall Street estimates of $2.07 billion in profit on revenue of $12.06 billion, according to an analyst survey by Thomson Reuters.

The computer and smartphone maker reported earnings two days before it is scheduled to unveil a new product at a San Francisco media event. While Apple has not said what it plans to introduce, industry watchers and many analysts believe the company will launch a tablet PC that will be a combined electronic book reader, multimedia player and personal computer.

"If you annualize our quarterly revenue, it's surprising that Apple is now a $50+ billion company," Steve Jobs, Apple's chief executive, said in a statement. "The new products we are planning to release this year are very strong, starting this week with a major new product that we're really excited about."

Apple sold 3.36 million Macs, a 33% jump from a year ago, and 8.7 million iPhones, which represented 100% unit growth. The only decline was in iPod sales, which fell 8% to 21 million units. Sales of the MP3 players have been falling for the last several quarters.

Apple benefited from an improving PC market worldwide. After being hammered in the first half of the year, the market in general recovered in the second half, ending the year 2.3% higher in terms of shipments than in 2008, according to IDC. Rival Gartner pegged 2009 growth year over year at 5.2%.

International sales accounted for 58% of Apple's revenue in the fiscal first quarter. Mac sales in Italy, France, Switzerland and Spain were up 40% or higher in the quarter, while sales in Australia and China surged more than 70% and 100%, respectively, Timothy Cook, Apple chief operating officer, told financial analysts during a teleconference. In the Asia-Pacific region in general, Mac sales increased 54%.

iPhone sales were also up outside the U.S. In Japan, sales rose 400% year over year and 500% in the Asia-Pacific region, which includes China.

Increasing sales in countries outside the U.S., particularly in emerging markets such as China and Brazil, is a major focus of Apple, Cook said. "We realize that we must do well in these markets to continue to grow."

Another potential area for growth is the corporate market for the iPhone. Interest in the smartphone has grown among companies since the release of iPhone 3GS last year, which had better security and other features meant to attract enterprises, Cook said. Today, about 70% of Fortune 500 companies are either looking at the iPhone or are deploying it among employees, Cook said. "We feel great about what's happening there."

For the fiscal second quarter, Apple forecasts revenue from $11 billion to $11.4 billion and earnings in the range of $2.06 to $2.18.

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