Apple Crushes Street Targets, Dispels iPhone Fears
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By Poornima Gupta - SAN FRANCISCO (Reuters) – Apple Inc’s quarterly results handily beat Wall Street’s estimates, driven by strengthening margins and robust global demand for its iPhones, boosting its shares more than 7 percent.
Shares of the world’s most valuable technology corporation resumed their rally after a two-week decline. Apple sold 35.1 million iPhones – its flagship product which accounts for about half its revenue – in the March quarter, outpacing the 30 million or so expected by Wall Street analysts.
“International iPhone sales were on fire,” Apple Chief Financial Officer Peter Oppenheimer told Reuters in an interview, adding that sales of the smartphone in the Greater China region jumped five-fold from the previous year.
Apple sold 11.8 million iPads, the latest version of which hit the store shelves in mid-March.
The strong results came after a 13 percent decline in Apple’s share price over the past couple of weeks in unusually volatile trading. The stock had long been considered a must-have in most U.S. equity portfolios.
“When you have a strong rally in a stock it often sells off for no better reason than uncertainty. I think you’re going to see the naysayers go away,” said Michael Yoshikami, CEO of YCMNet Advisors.
Gross margins in the fiscal second quarter climbed to 47.4 percent from 41.4 percent a year earlier, surpassing Wall Street’s average forecast of 42.8 percent.
The consumer electronics giant said its fiscal second-quarter revenue rose 59 percent to $39.2 billion, better than the average analyst estimate of $36.8 billion, according to Thomson Reuters I/B/E/S.
Net income rose to $11.6 billion, or $12.30 a share, from $6 billion, or $6.40 per share, a year earlier. That also outpaced Wall Street’s target of $10.04 a share.
Apple’s shares gained more than 7 percent to $601, from a close of $560.28 on Nasdaq.
(Reporting By Poornima Gupta and Edwin Chan, Editing by Richard Chang)
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