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Apple posts strong profits

Posted: 23 Jan 2009     Print Version  Bookmark and Share

Keywords:iPod  PC market  computer sales  iPhone sales 

Despite the economic slump, Apple Inc. posted a six per cent sales increase in its latest quarter and record sale for its iPods. The company posted strong profits, in part buoyed by the fact prices for components such as DRAMs, LCDs and NAND flash dropped nearly to variable cost, said chief operating officer Tim Cook.

Apple recorded revenue of Rs.50,887.01 crore ($10.17 billion) and net profits of Rs.8,055.86 crore ($1.61 billion) in its quarter ending December 31. That compares to revenue of Rs.48,034.93 crore ($9.6 billion) and net profit of Rs.7,905.75 crore ($1.58 billion) in the same quarter of 2007.

The company sold 2.27 crore iPods in the quarter, the most in any three-month period to date with all its growth coming from outside the United States. Apple also saw sales of Macintosh computers rise nine per cent from last year to 25 lakh units and iPhone sales to hit 43.6 lakh units.

Apple defied gravity, particularly in the PC market, which International Data Corp. estimated contracted in the last quarter of 2008. Apple's computer sales were fuelled by new portables launched in October.

Defying gravity
Portables made up 71 per cent of Apple's computer sales in the quarter. The growth came despite the fact the company's desktop sales dove 54 per cent in the period, partly because the company has not refreshed its product line since 2007. IDC said industry-wide desktop sales fell about 16 per cent in the quarter.

The solid performance has helped Apple stash away a war chest that now amounts to some Rs.140,101.89 crore ($28 billion) in cash. Apple execs made no comment on questions of how they use the cash for investments or acquisitions.

"Our outstanding results generated over Rs.18,013.10 crore ($3.6 billion) in cash during the quarter," said Peter Oppenheimer, Apple's chief financial officer in a prepared statement. "Looking ahead to the second fiscal quarter of 2009, we expect revenue in the range of about Rs.38,028 crore to Rs.40,030 crore ($7.6 billion to $8 billion).

"It was a very solid quarter all around," said Brain Marshall, a financial analyst with Broadpoint.AmTech. "They beat expectations and March guidance is lower than street numbers but well above whisper numbers—so it's positive all around," he said.

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