For the quarter ended Sept. 26, Apple said profits rose to $1.67 billion, or $1.82 per share, from $1.14 billion, or $1.26, a share, in the same period a year ago. Revenue in the quarter was $9.87 billion, compared to $7.9 billion a year ago.
Apple's results smashed Wall Street expectations. Analysts surveyed by Thomson Reuters expected on average earnings of $1.42 a share on revenue of $9.2 billion. After the announcement, Apple stock rose by about 7% in after hours trading to more than $203 a share.
Apple sold 3.05 million Mac computers during the quarter, a 17% increase over the year-ago quarter. The company sold 7.4 million iPhones, a 7% increase. Sales of iPods, however, fell 8% to 10.2 million units, a reflection of what has become a saturated media player market.
"We are thrilled to have sold more Macs and iPhones than in any previous quarter," Steve Jobs, Apple chief executive, said in a statement.
Gross margin for the quarter increased year-on-year to 36.6% from 34.7%. International sales accounted for 46% of Apple's revenue in the quarter. For the full fiscal year, Apple's revenue rose by 12% to $36.5 billion and net income 18% to $5.7 billion.
While other computer makers are struggling during the economic recession, Apple has managed to keep sales and profits growing. Because Apple sells mostly to consumers, it has done better during the downturn than manufacturers more dependent on business sales. While consumers continue to buy computers, particularly laptops, businesses have cut way back and probably won't resume buying until next year.
"Apple's business model seems to be doing well in the current economic climate," Michael McGuire, analyst for Gartner, told InformationWeek.
Going forward into the holiday shopping season, Apple will have increasing competition from computer makers with new products running Windows 7, which Microsoft plans to release Thursday.
In addition, Verizon will likely heat up competition against the iPhone. Verizon is getting ready to ship smartphones based on Google's Android OS. While Apple has done well selling iPhone hardware, much of the competition against Verizon will be out of Apple's hands. Apple has an exclusive iPhone partnership with AT&T, and that company will need to improve its data network to match Verizon, McGuire said.
For the fiscal first quarter of 2010, Apple expects revenue in the range of $11.3 billion to $11.6 billion, and predicted earnings for the quarter to range from $1.70 to $1.78 a share.
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