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7/25/2007
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IPhone Sales Miss But Apple Earnings Surge On Mac, iPod

Apple said it sold a total of 270,000 iPhone handsets in stores and through its U.S. carrier AT&T in the last 30 hours of the quarter.

Despite a massive marketing campaign and months of industry buzz, the iPhone sold 270,000 units in its first two days of sales.

Still, Apple profits and revenues soared in the third fiscal quarter due to strong sales of Mac computers and iPod media players. The computer maker, which reported earnings for its fiscal third quarter, indicated that iPhone sales were less than expected. Apple said it sold a total of 270,000 iPhone handsets through a combination of in-store and online sales as well as through its U.S. carrier AT&T in the last 30 hours of the quarter, which ended June 30.

On Tuesday, AT&T said it had activated 146,000 iPhones in the first two days it was on sale. AT&T recognizes sales of mobile phones at the time of activation. Apple recognizes revenue when the product is shipped.

Apple net profits reached $818 million, or 92 cents a share, compared with a net income of $472 million, or 54 cents a share, during the same period a year ago. Revenues for the quarter were $5.41 billion, up almost 25% from $4.37 billion a year ago.

Quarterly sales of the Mac were the highest ever for the company, Steve Jobs, chief executive of Apple, said. The company shipped 1.76 million Macs, representing a 33% increase over a year ago. IPod sales rose by 21% to 9.82 million units.

"We're thrilled to report the highest June quarter revenue and profit in Apple's history, along with the highest quarterly Mac sales ever," Jobs said in a statement. "iPhone is off to a great start -- we hope to sell our one-millionth iPhone by the end of its first full quarter of sales -- and our new product pipeline is very strong."

Jobs announced back in January that Apple's goal was to sell 10 million iPhone units within the first 12 months of sales.

Gross margin for the quarter was 36.9%, up from 30.3% a year ago. International sales accounted for 40% of the quarter's revenue. Cash flow from operations exceeded $1.2 billion for the quarter.

For the fourth quarter, Apple forecast revenue of about $5.7 billion and earnings of 65 cents a share.

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