Apple posts 78% rise in Q3 profit

APPLE posted a 78% surge in third-quarter profit as customers began flocking to the new iPad tablet computer and latest version of the iPhone.

Net income rose to $3.25 billion (€2.52bn), or $3.51 a share, from $1.83bn, or $2.01 a share, a year earlier, the Cupertino, California-based company said yesterday in a statement.

Analysts surveyed by Bloomberg were expecting, on average, per-share profit of $3.11. Sales in the three months ended June 26 gained 61% to $15.7bn, topping analysts’ $14.7bn average estimate. Apple gained in extended trading.

The results are an early gauge of demand for the tablet introduced on April 3. The company sold 3.27 million of the devices that deliver video, e-books and web access, putting Apple at the forefront of electronics makers benefiting from a rebound in consumer spending after the recession.

“That’s quickly becoming a large revenue generator,” Andy Hargreaves, an analyst at Portland, Oregon-based Pacific Crest Securities Inc, said of the iPad in an interview before the results were announced. “It’s far exceeded what anyone’s expectations were.”

During the quarter, Apple also sold 8.4 million iPhones, 3.47 million Mac computers and 9.41 million iPods.

Apple, based in Cupertino, California, rose $6.31 to $251.89 by 4pm New York time in Nasdaq stock market trading. The shares have gained 20% this year.

Gross margin, the percentage of sales remaining after deducting production costs, was 39.1. Apple, which posted second-quarter gross margin of 41.7%, said in April that the figure would narrow because of “very aggressive” pricing for the iPad. The company forecast third-quarter gross margin of about 36%.

In the current quarter, Apple projected sales will be about $18bn and per-share earnings of about $3.44. Analysts on average forecast sales of $17 billion and profit of $3.83 a share.

Apple’s forecasts typically fall short of analysts’ estimates. Over the past 16 quarters, its projections have been 3% below analysts’ sales estimates and 12% below earnings-per-share predictions, according to Gene Munster, an analyst at Piper Jaffray Cos in Minneapolis.

The company also is contending with criticism over the design of the iPhone 4 antenna, which results in diminished cell phone reception. The company, which has sold more than 3 million iPhone 4s, is giving away cases to remedy the flaw.