Amid widespread corporate layoffs and giant downturns in the tech sector, Apple released its financial results for the second quarter that ended on March 28, 2009. Many predicted that Apple had fared much better than other tech giants due to the diversity of its product line, which includes cell phones (iPhones), applications, music (iTunes), and entry level luxury computers (iMac). What Apple produced, however, shocked industry analysts and economists alike. The company announced the best March quarter revenue and earnings in its history.
Apple posted revenue of $8.16 billion and net quarterly profit of $1.21 billion, equating to $1.33 per diluted share. During the same quarter one year ago, Apple posted revenue of $7.51 billion and net quarterly profit of $1.05 billion, or $1.16 per diluted share. The gross margin for Apple was up to 36.4% as compared to last year’s 32.9% during the same time period. International sales, which are a focus of Apple’s recent online store upgrades, accounted for 46% of the quarter’s revenue.
During the quarter, Apple sold 2.22 million Macintosh computers, representing a 3% unit decline from the same quarter in 2008. Many expected that number to be significantly worse because of Apple’s position as a luxury computer manufacturer with a much higher cost than any Windows PC. Apple’s Mac computer line being down 3% was negated by other more profitable segments of their organization.
Peter Oppenheimer, Apple’s current Chief Financial Officer, was quoted during the company’s webcast as saying, “Apple’s financial condition remains very robust with almost $29 billion in cash and marketable securities on our balance sheet. Looking ahead to the third fiscal quarter of 2009, we expect revenue in the range of $7.7 billion to $7.9 billion.”
As many industry analysts expected, the iPhone division accounted for a significant portion of Apple’s unexpected growth in the second quarter of 2009. Sales of iPhone 3G models were once again up, with approximately 3.79 million units sold. On top of the large number of iPhones sold during the quarter, Apple stated that approximately 11 million iPods were bought during the same time frame. The release of the iPod Touch and updated iPod Shuffle accounted for the bulk of the success in sales. Speaking specifically to the iPhone, mobile partner AT&T also released its financial results. AT&T noted that 40% of all new activations during the quarter came from iPhone 3Gs.
Undoubtedly, what has kept Apple competitive and profitable is its diverse product lines across a spectrum of technology offerings. Many need to remember that it’s Apple and not “Apple Computer” from the 1990s. The segments of the business that were once widely criticized (specifically iTunes) are now responsible for Apple flourishing during tough economic times.
Although many were expecting worse from Apple during this profitability announcement, no movement on the rumors of Steve Jobs or of any new product refreshes were discussed. Despite no such statements, many felt that stronger-than-expected Macintosh sales will fuel some optimism that the United States consumer landscape isn’t completely dead. Could this announcement be the first positive step in an economic turnaround? Certainly stock traders and tech workers hope so.
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