Apple Inc. said yesterday that its second-quarter profit rose 88 percent because of soaring consumer demand for its iPod media players and Macintosh computers. The company's shares surged 6.3 percent at one point in extended trading.
Net income increased to $770 million, or 87 cents a share, from $410 million, or 47 cents a share, a year earlier, the Cupertino, Calif., company said yesterday in a statement. Analysts surveyed by Bloomberg had estimated earnings of 63 cents a share. Sales rose 21 percent to $5.26 billion, beating expectations.
Apple sold 10.5 million iPods and 1.52 million Macs in the quarter ended March 31, boosted by demand for notebook computers and the low-cost iPod Shuffle. Lower prices for memory chips and screens increased profit. Chief executive officer Steve Jobs is counting on the new iPhone, a product due in late June, to help spur results this quarter.
"The numbers were pretty unbelievable," said Chris Armbruster, an analyst at Al Frank Asset Management in Laguna Beach, Calif. The firm manages about $900 million, and owns Apple shares. "The biggest thing that jumps out at me was their gross margin."
Gross margin - the percentage of sales left after excluding the cost of goods - widened to 35.1 percent in the quarter from 29.8 percent a year earlier. Most analysts were expecting 30 percent, said Shaw Wu at American Technology Research in San Francisco.
Apple shares rose $6 to $101.31 at one point in extended trading after the results were released. The stock increased $2.11 to close at $95.35 in Nasdaq Stock Market trading.
Sales this quarter will be $5.1 billion, and profit will be about 66 cents a share, Apple said in the statement. Analysts on average were expecting revenue of $5.43 billion and earnings of 67 cents, according to a Bloomberg poll.