Apple posts record sales on iPhone debut, strength of Mac computers
Apple Inc.'s stock price hit a new record high in trading this morning after the company's fiscal Q3 report issued late Wednesday afternoon bested analyst estimates and revealed a whopping 73 percent year-over-year profit growth.
The share price of the Cupertino, Calif.-based consumer electronics maker took a dip earlier this week, as speculation grew that the company's iPhone sales had not delivered in accordance with the hype that surrounded the handset at its June 29 debut; on Tuesday, AT&T Inc. reported in its Q2 results that it had activated just 146,000 iPhones in the 30 hours between the iPhone's release and the financial period's end, well below many analysts' projections for the handset's opening performance.
However, Apple's fiscal Q3 financials quelled those fears and showed that the company actually sold 270,000 iPhones in that period, some of which had apparently not been activated on AT&T's network by the time the quarter wrapped.
"We did have some activations problems during the first week or so," Peter Oppenheimer, Apple's senior VP and CFO, said in an earnings call Wednesday. "Since then, AT&T has corrected the most common cause of these difficulties and we are now experiencing a very high percentage of problem-free activations."
The company's expectations for the handset remain high: Apple said it expects to sell one million iPhones during its fiscal Q4, and to sell 10 million phones by the end of 2008. Apple also said it will debut the iPhone in Europe during its Q4.
Overall for its fiscal Q3, Apple recorded a company-high $5.41 billion in sales, up 23.7 percent from the $4.37 billion it posted in Q3 2006 and up 2.8 percent from its Q2 sales. Apple's $818 million Q3 profits were a 73.3 percent increase year-over-year and a 6.2 percent increase from Q2. Apple chalked up its sales and profit growth to record-breaking sales of Macintosh computers and continued strong demand for iPods.
The stellar earnings news was well received on Wall Street: Apple's stock price opened Thursday morning at $145.94, up 6.3 percent from its closing price Wednesday afternoon prior to the earnings report. The company's share price went on to hit a new record high of $148.50 around 11:00 a.m. ET Thursday morning as news spread of the company's latest sales and profit report. The stock closed slightly lower today at $146 a share.