Apple Stock Soars After Posting Better-Than-Expected Earnings

By Alex Pham, Los Angeles | July 23, 2013 5:11 PM EDT

Apple Inc. on Tuesday posted third-quarter financials that came in slightly ahead of Wall Street analysts' lowered expectations, sending its stock soaring more than $15, or 3.6%, in after-hours trading immediately following the earnings release.

Apple's shares earlier in the day lost $7.32, or 1.7%, to close at $418.99, just prior to the earnings report. Over the past 12 months, Apple's stock has swung from a low of $385.10 to a high of $705.07 as investors sought to get a grip on whether the Cupertino, Calif., producer of iPhones and iPads will be able to maintain its mojo in the highly competitive consumer electronics and digital media marketplace. Among Apple's more tenacious rivals are Google Inc., Amazon.com and Microsoft Corp.
The company reported $6.9 billion in net income, or $7.47 a share, on $35.3 billion in revenue the third quarter, ended June 29. A year earlier, Apple posted slightly lower revenue of $35 billion, but much higher profit, $8.8 billion, or $9.32 per diluted share, as its gross margins declined to 36.9% compared to 42.8% in the same quarter last year. This is largely because of a shift in the sales mix toward lower margin devices, as well as lower prices for its older iPhone models, among other factors.
Wall Street analysts polled by Thomson Reuters had expected Apple to post $35 billion in revenue, $7.32 a share in net income and gross margins of 36.7%.
Its iTunes store continues to do brisk business. Revenue for iTunes Software and Services, which includes Apple Care warranties for devices and other services, grew 25% to just under $4 billion, up from $3.2 billion last year.
Apple executives are hosting a live webcast of its earnings call with analysts at 5PM, Eastern.

http://www.billboard.com/biz/articles/news/digital-and-mobile/4323457/apple-stock-soars-after-posting-better-than-expected