During Apple’s quarterly earnings call this afternoon, the company reported record Mac and iPhone sales during the fiscal 2010 first quarter, and commented a bit about problems with AT&T, and the their relationship with Google.
Compared to the same time last year, revenue is up 50% to 15.68 billion, with a net profit of $3.38 billion, up from $11.88 billion revenue and $2.26 billion net profit during Q1 2009. The company delivered $3.67 per diluted share, up from $2.50 per diluted share a year ago.
In addition, the company also reported selling 8.7 million iPhones during the quarter, a 100% increase year over year, as well as 21 million iPods, and 3.36 million Macs. Sales of the classic iPod models are down, but iPod Touch sales are up 55% compared to the same period a year ago.
During the live call, it was revealed that the iPhone is now available in 86 different countries, and 13 new carriers were added during the Q1 2010 period. With the recent debut of the iPhone in China, many have speculated as to how many devices were actually sold, today Apple reports that as of this month, 200,000 devices have been activated in that country.
The company also noted that because of recent accounting changes, they are now recognizing the majority of revenue from AppleTV and iPhone sales all at once, in 2 elements. First, the cost of the hardware, and then a second element of a “right to receive upgrades” to the software. Peter Oppenheimer, the company’s CFO, says in the past that they have estimated the value of future software upgrades at $25 per iPhone, and $10 per AppleTV.
In addition, Mr. Oppenheimer answered a question about their relationship with Google by saying they cooperate in some areas, and compete in others.
During the call, Tim Cook was asked about the benefit of staying with a single carrier, AT&T Wireless, for iPhone service. Cook responded by saying that most customers are happy with the service, but they were aware of problems in specific cities and were “very confident” that issues would be resolved.
Mr. Cook also commented on the state of the App Store approval process, saying that the majority of rejections were due to actual bugs in the code of an App, but that porn is always rejected, and the majority of Apps featuring graphic violence are approved so long as they are rated appropriately.
As usual, Apple execs refused to comment on the impending event scheduled for Wednesday, other than to express general enthusiasm for the “major new product that we’re really excited about”, but stay tuned to Rumors for more on this greatly anticipated announcement.
We’ve reprinted the press release from http://www.apple.com/pr/library/2010/01/25results.html below:
CUPERTINO, California—January 25, 2010—Apple® today announced financial results for its fiscal 2010 first quarter ended December 26, 2009. The Company posted revenue of $15.68 billion and a net quarterly profit of $3.38 billion, or $3.67 per diluted share. These results compare to revenue of $11.88 billion and net quarterly profit of $2.26 billion, or $2.50 per diluted share, in the year-ago quarter. Gross margin was 40.9 percent, up from 37.9 percent in the year-ago quarter. International sales accounted for 58 percent of the quarter’s revenue.
Apple sold 3.36 million Macintosh® computers during the quarter, representing a 33 percent unit increase over the year-ago quarter. The Company sold 8.7 million iPhones in the quarter, representing 100 percent unit growth over the year-ago quarter. Apple sold 21 million iPods during the quarter, representing an eight percent unit decline from the year-ago quarter.
During the quarter Apple elected retrospective adoption of the Financial Accounting Standards Board’s amended accounting standards* related to certain revenue recognition. Adoption of the new accounting standards significantly changes how the Company accounts for certain items, particularly sales of iPhone® and Apple TV®.
“If you annualize our quarterly revenue, it’s surprising that Apple is now a $50+ billion company,” said Steve Jobs, Apple’s CEO. “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.”
“We are very pleased to have generated $5.8 billion in cash during the quarter,” said Peter Oppenheimer, Apple’s CFO. “Looking ahead to the second fiscal quarter of 2010, we expect revenue in the range of about $11.0 billion to $11.4 billion and we expect diluted earnings per share in the range of about $2.06 to $2.18.”