July 20, 2011 12:01 am

iPad 2 lifts Apple above forecasts

Apple beat Wall Street expectations with third-quarter revenues up 82 per cent and profits up 125 per cent year-on-year fuelled by demand for its iPad, iPhone and Mac products.

The company said its record sales had been led by the iPad 2 and growing demand for its products in newer markets, such as China.

Apple shares rose more than 5 per cent to $397.20 in after-hours trading in New York, despite the company suggesting that its fourth-quarter outlook would be weaker than expected.

“We ... have a future product transition that we’re not going to talk about today and [this] will impact our September quarter,” said Peter Oppenheimer, chief financial officer.

Apple did not announce in June its usual annual update to the iPhone, leading to speculation that an iPhone 5 would be introduced in its September quarter.

The iPhone 4 proved its staying power in the third quarter, with 20.3m sold compared with 8.4m a year earlier.

Apple said the increase was aided by the number of mobile carriers selling the phone increasing to 228 in 105 countries, up from 186 in 90 in the second quarter. There had been strong growth in Brazil, Mexico, China and the Middle East in particular.

Tim Cook, chief operating officer, said China was key to the company’s results, with sales up more than sixfold year-on-year in China and Taiwan, reaching $3.8bn.

“This has been a substantial opportunity for Apple and I firmly believe we are just scratching the surface right now,” he said.

Apple reported profits of $7.31bn or $7.79 per share on revenues of $28.57bn, well ahead of analyst expectations of $5.87 a share on sales of $25bn, according to Bloomberg data.

Cash flow of $11.1bn helped boost the company’s cash on hand to $76.2bn, up from $65.8bn in the previous quarter. The company predicted revenues of about $25bn and earnings of about $5.50 a share for the September quarter.

Apple sold 9.25m iPads during the June quarter, up from 3.3m a year earlier – an increase of 183 per cent.

The increase came in spite of acute shortages of the iPad 2, launched in March, due to overwhelming demand for the tablet.

“Sales of iPad have absolutely been a frenzy for people to get one,” said Mr Cook. “We were selling every unit we could make. As we stepped into July, we have been able to increase supply further and some [models] in some countries are at a supply-demand balance.”

Apple announced it would launch on Wednesday OSX Lion, a new version of its operating system for Mac computers, which recorded a 14 per cent increase in unit sales year-on-year to 3.95m units.

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