Apple Profit More Than Doubles On Strong IPhone, IPad Sales

7/19/2011 5:42 PM ET

(RTTNews) - Apple Inc. (AAPL: News ) said Tuesday after the markets closed that its third quarter profit more than doubled from last year, driven by strong sales of its iPhones and iPad multimedia devices. The company's quarterly earnings per share also breezed past Wall Street expectations as did its quarterly sales. However, the company forecast fourth quarter revenue and earnings below analysts' current consensus estimates.

The Cupertino, California-based computing and electronics company reported net income for the third quarter of $7.31 billion or $7.79 per share, compared to $3.25 billion or $3.51 per share for the year-ago quarter.

On average, 51 analysts polled by Thomson Reuters expected the company to earn $5.80 per share for the third quarter.

Gross margin for the quarter improved to 41.7% from 39.1% in the prior year quarter, while operating margin for the quarter increased to 32.8% from 26.9% a year earlier.

Net sales for the third quarter jumped 82% to a record $28.57 billion from $15.70 billion in the same quarter last year. International sales accounted for 62% of the quarter's revenue. Forty-seven analysts had a consensus revenue estimate of $24.92 billion for the third quarter.

"We're thrilled to deliver our best quarter ever, with revenue up 82 percent and profits up 125 percent," said Steve Jobs, Apple's CEO. "Right now, we're very focused and excited about bringing iOS 5 and iCloud to our users this fall." Apple, known for its conservative outlook, had forecast third quarter earnings of $5.03 per share on revenues of about $23 billion.

Apple sold 3.95 million Macintosh computers during the third quarter, up 14% from the year-ago quarter.

iPhone sales surged 142% year-over-year to 20.34 million units in the third quarter, while iPad sales jumped 183% to 9.25 million units.

The iPhone's huge success has attracted many technology majors to the lucrative smartphone market.

Apple started selling iPad, a tablet computer positioned in a category between a smartphone and a laptop, in April 2010. The company released the next version of the device, iPad 2, in March this year.

However, third quarter sales of the company's iPod music players dropped 20% to 7.54 million units in the quarter.

During the quarter, Apple CEO Steve Jobs unveiled the eighth and latest version of the Mac OS X operating system, called Lion. The company also introduced its cloud services called the iCloud, an online storage service that is expected to include music streaming.

iCloud will help Apple retain its dominance in the smartphone and tablet markets amid fresh competition from devices powered by Google Inc.'s (GOOG) Android software. With the help of the new Mac operating system, the company will augment its PC business.

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