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Apple Must Have Missed the Bit about a Recession

iPhone revenues tripled to $1.69 billion

Apple hit one out of the park Tuesday when it reported fiscal third-quarter earnings of $1.23 billion, or $1.35 a share, up 15%, on revenues, up 12%, to $8.34 billion with a tickled gross margin of 36.3% despite higher component costs and iPhone price cuts. Cash flow from operations came to $2.3 billion.

The company said it was the best non-holiday quarter in its history.

Wall Street figured it would come in with earnings of $1.17 a share on revenues of $8.16 billion according to Thomson Reuters, with a margin of 34%. Apparently it needs to redo its models.

Apple sold a more-than-expected 2.6 million Macs, up 4% year-over-year. It cut laptop prices and laptop units were up 13% while desktops were down 10% though laptop revenues were off 2% and total Mac revenue was down 7.8%.

It also sold 10.2 million iPods, down 7% - the June quarter is usually slow for iPods, which are being cannibalized by the iPhone anyway with iPod revenue down 11%, Apple said.

Its piece de résistance, however, was moving 5.2 million iPhones, up a ridiculous - steady now - 626% in the middle of a recession.


iPhone revenues tripled to $1.69 billion.

The Mac sales probably fooled Wall Street having been down previously. And Apple might have sold more iPhones if it wasn't running short of its brand new 3GSs. The company said it's working to meet demand.

Historically a homeboy, it said international sales accounted for 44% of revenue, which increased everywhere, even in Europe, which has been doing nobody else any good.

And despite all this talk of iPhone not cutting it with corporate Apple said 20% of the Fortune 500 had bought 10,000 iPhones.

Usually conservative in its forecasts, it said it's expecting revenues of $8.7 billion-$8.9 billion this quarter and earnings of around $1.18-$1.23. Wall Street thinks it's good for at least $1.30 on $9.1 billion. This of course is the back-to-school season.

Shares were up 4% and change after-hours to $158.15.

More Stories By Maureen O'Gara

Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

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