Apple Inc gained after reporting that second-quarter profit almost doubled, lifted by sales of iPhones, and the company allayed concerns that growth will be crimped by the earthquake in Japan and its aftermath.
Net income in the fiscal second quarter rose to $5.99 billion, or $6.40 a share, from $3.07 billion, or $3.33, a year earlier, Cupertino, California-based Apple said in a statement yesterday. Sales jumped 83 percent to $24.7 billion. Analysts predicted profit of $5.39 a share on sales of $23.4 billion, the average of estimates compiled by Bloomberg.
Verizon Wireless started selling the iPhone in February, helping Apple sell 18.7 million units last quarter, surpassing the 16.3 million average of 13 predictions in a Bloomberg survey. Apple said the earthquake isn’t having a “material” impact on operations and its ability to crank out products.
“To say it’s extraordinary doesn’t do it justice,” Ryan Jacob, chairman of the Jacob Internet Fund, which owns Apple shares, said of Apple’s results.
Apple gained as much as 2.4 per cent in German trading to the equivalent of $354.80 and was up 2.3 per cent as of 9:08 a.m. in Frankfurt. The stock rose 3.2 per cent in extended US trading yesterday to as high as $353.39 after the results were released. The shares had gained $4.55 to $342.41 in Nasdaq Stock Market trading.
Apple, transitioning to the new iPad 2 introduced on March 11, couldn’t make enough to meet demand. The shortfall led to lower sales than analysts predicted. Apple is ramping up production as it prepares to start selling the tablet computer in 13 additional countries this month, Chief Operating Officer Tim Cook said on a conference call yesterday.
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“Their products are being embraced wholeheartedly by the entire world,” Michael Walker, a portfolio manager at WP Stewart & Co, said in an interview. “Right now the only limit to how many products they can sell is how many they can produce.”
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Sales of the tablet in the third quarter may match those of the holiday shopping season, when Apple sold 7.3 million, Walker said. Apple sold 4.69 million iPads last quarter, fewer than the 6.1 million units predicted.
“The iPad has the mother of all backlogs,” said Cook, who has taken over day-to-day leadership of Apple while Chief Executive Officer Steve Jobs is out on medical leave. Cook said Jobs continues to be involved in decision-making.
“We do see him on a regular basis,” Cook said. “I know he wants to be back full time as soon as he can.”
Cook said Apple’s access to components hasn’t been harmed by the earthquake in Japan and that it doesn’t expect any material effect from the disaster this quarter.