If you follow such things carefully, you'll notice that Apple's stock has taken a huge beating in recent days, not because of expectations of poor sales in March financial quarter, but as the result of fears and, perhaps, profit taking. What fears? Well, consider AT&T's report of a big drop in smartphone activations for the March quarter. On the other hand, 78% of those activations were iPhones, and it's normal for sales to dip after the holidays. Besides, it's not that AT&T is the only carrier to carry the iPhone. Worry instead about companies that make that other 22%.
The Wall Street freakout ended when Apple announced financial results for the March quarter that were second only to the December quarter in 2011 right after the trading day ended, predictably causing a big rise in the stock price in after-hours trading.
The results for Apple's fiscal 2012 second quarter, which ended in March, resulted in a quarterly revenue of $39.2 billon, and a net profit of $11.6 billion, or $12.30 per diluted share. This compares to last year's numbers of $24.7 billion revenue, and a net profit of $6.0 billion, or $6.40 per diluted share in the March quarter. Wall Street analysts had estimated Apple's earnings at $10.02 per share on revenue of $36.9 billion.
"Our record March quarter results drove $14 billion in cash flow from operations," said Peter Oppenheimer, Apple's CFO, in a press release. “Looking ahead to the third fiscal quarter, we expect revenue of about $34 billion and diluted earnings per share of about $8.68." Fans of Apple financial data can check their site for the raw numbers, and remember that future projections tend to be quite conservative. Apple never loses. Indeed, ahead of giving out modest cash dividends this summer, Apple's cash stash now stands at $110.2 billion.
There were two clear winners in those results. Some 35.1 million iPhones were sold, an 88% unit growth over last year, along with 11.8 million iPads, representing a 151% increase. In contrast, industry estimates pegged the former at 31.2 million, and the latter at 11.9 million. Although estimates of iPad sales somewhat overshot the mark, chronic backlogs after the third generation model was introduced no doubt made it difficult for Apple to move more product. Indeed, Apple is still struggling to keep up with demand for the new iPad.
Mac sales, at four million, were somewhat less than expected at a time when there haven't been any updates to the Mac lineup in a while. Some even suggest the Mac platform is getting reduced attention from Apple, although it's also true that expected new models, plus this summer's arrival of Mountain Lion, will surely increase potential sales. Besides, sales of the Mac were still 7% ahead of last year, coming at a time when PC sales overall remain relatively flat, with a 2% rise.
While Apple didn't announce any new Macs, the arrival of the first wave of the new Intel Ivy Bridge chips signals model refreshes in the next few weeks. With the quad-core processors shipping first in quantity, the more powerful MacBook Pros, and perhaps the iMac, might get arrive first, followed by the entry-level MacBook Pro and the MacBook Air once the dual-cores are available in quantity. But this is strictly guesswork.
By the way, Apple attributes relatively flat Mac sales for the quarter to the fact that, in the comparable quarter last year, there was a major notebook refresh. When the next refresh arrives, don't expect anything more than the usual press release.
Despite the ongoing problems with iCloud, Apple announced that the service now has 125 million users. When asked about customer feedback, Oppenheimer declined to provide that information, saying it would help competitors. He described reaction in general as "off the charts," although most of you know that iCloud is rife with serious problems. I take it as hype and little more, or maybe I expect too much.
Indeed, as of today, I still cannot rate iCloud is quite ready for the world, despite more and more signups. My worst iCloud irritants include duplicate entries in Address Book, a problem that becomes worse when, after deleting a duplicate entry, it returns ghostlike. On occasion, I get iCloud login prompts on my iPhone 4S. Maybe demand is off the charts, as Apple claims. But it sounds to me as if the lingering problems are off the charts too.
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