Festive boost lifts Apple to record sales

Apple last night reported record quarterly sales and profit as Christmas purchases of the new iPhone helped the company steer clear of the consumer spending slump that has hurt its rivals.

Fiscal first-quarter profit more than doubled to $13.1 billion (€10bn), or $13.87 a share, compared with $6bn, or $6.43 a share, a year earlier, Apple said. Sales rose 73% to $46.3bn. Analysts surveyed by Bloomberg on average estimated profit of $10.14 a share on sales of $39bn.

Apple sold 37 million iPhones, up from the previous record of 20.34 million. Customers snapped up the 4S model that went on sale in October, a week after the death of co-founder Steve Jobs. The results mark the first time the company’s quarterly revenue beat Hewlett-Packard’s, underscoring how its focus on sleek touch-screen mobile devices has reshuffled industry leadership.

“It’s a milestone,” Brian White, an analyst at Ticonderoga Securities LLC, said of Apple surpassing Hewlett-Packard in sales. “There are so many growth drivers around this company.”

Apple, in looking ahead to results for the second quarter, forecast revenue of about $32.5bn and profit of $8.50 a share. That compares with average analysts’ predictions for sales of $31.9bn and profit of $7.96 a share.

Apple shares, up 25% in the past 12 months, had closed at $420.41 in New York.

In the first quarter, which ended on December 31, Apple sold 15.4 million iPads, topping the 13.5 million predicted by analysts. iPhone sales on average were predicted to reach 30.2 million.

“Apple’s momentum is incredibly strong, and we have some amazing new products in the pipeline,” Apple chief executive Tim Cook said. The period was the first full quarter since Cook became chief executive in August, when Jobs retired.

The results contrast with those of companies such as Microsoft and Intel, which are grappling with slower PC sales, in part because customers are choosing to buy smartphones and tablets instead. They are trying to catch up by rolling out mobile products, including Microsoft’s Windows 8 operating system, designed to integrate smoothly with smartphones and tablets.

Rival smartphone makers also have struggled to keep pace with Apple. HTC and Motorola, two of the biggest companies whose devices run Google’s Android operating system, disappointed investors with results for recent quarters. Research In Motion, which has lost 90% of its market value since 2008, replaced its chief executives this week.

Apple collects more than half of the profits in the mobile phone market, according to Horace Dediu, a former Nokia analyst who now operates the Asymco industry research website.

“They are dancing to their own tune,” said Brian Marshall, an analyst at ISI Group in San Francisco. “Everybody else is losing market share if they compete against Apple.”

Bloomberg