Apple posts its best non-holiday quarter
Despite an economy that has crippled consumer spending, shoppers still shelled out money for iPhones, iPod Touches and other premium products sold by Apple Inc., driving the company to post its best June quarter sales, the electronics giant said Tuesday.
The recession, however, did not spare Yahoo Inc. The beleaguered Internet portal posted a 13% plunge in revenue over a year earlier as businesses continued to cut back spending on online advertising.
“To spend on advertising, you have to be somewhat optimistic about the future,” said Daniel Ernst, an analyst with Hudson Square Research. “And right now, companies are still in varying degrees of distress. Apple, on the other hand, had a phenomenal quarter. But their performance is very company-specific” and less indicative of how the economy is doing, he said.
“We are very proud of this result particularly given the economic environment around us,” Apple Chief Financial Officer Peter Oppenheimer said during Tuesday’s conference call with analysts.
He noted that Apple rang up $8.3 billion in sales in its third quarter ended June 27. It was the Cupertino, Calif., company’s best quarterly revenue performance outside the winter holiday season, representing a 12% increase from $7.5 billion a year earlier.
Profit grew 14.6% to $1.23 billion, or $1.35 a share, from $1.07 billion, or $1.19 a share, last year.
Apple shares, which have climbed 67% this year, surged as much as 4.6% in after-hours trading following the earnings release. It had closed down $1.40, or 1%, to $151.51.
Apple said it sold 5.2 million iPhones, 10.2 million iPods and 2.6 million Macintosh computers in the quarter. Sales of Mac desktops increased 4% from the second quarter, and laptop sales jumped 25% in the same period despite an estimated 3% contraction in the overall home computer market in the quarter, according to estimates from IDC.
Sales of iPods, the digital music player that helped put Apple on the map as a hip technology company, declined 7%, down from 11 million iPods sold in the same quarter last year.
Oppenheimer said that Apple expected the decline as customers opted to instead buy iPhones and use them as their digital music player, among other functions. Sales of iPod Touches, the premium-priced player that has the same touch screen as the iPhone, grew 130%, helping to cushion the drop in iPod sales.
Separately, Yahoo said second-quarter net income rose 8% to $141 million from $131 million a year earlier, despite a drop in revenue.
Also Tuesday, the Sunnyvale, Calif., company launched a re-engineered home page and announced a local advertising partnership with an AT&T; ad sales unit.
But the flurry of announcements didn’t obscure the portal’s tenuous position: Much of the profit came from a year of serious cost-cutting, as Yahoo trimmed operation expenses by nearly $150 million since the second quarter of 2008.
Revenue fell to $1.6 billion from $1.8 billion, partly because of lagging income from its advertising businesses, though Yahoo said currency fluctuations were also a major factor in the decline.
“It’s certainly still a company in transition,” said Benjamin Schachter, an analyst with Broadpoint AmTech, who said Yahoo was battling both against the economics situation and its own history of shaky management.
Yahoo remains the Web’s second-most-trafficked property, according to Web ratings firm comScore. Sites owned by the portal drew 154 million U.S. visitors in June, barely trailing Google Inc.’s 157 million.
Yahoo CEO Carol Bartz said the company would leverage its market position and brand power to become “the center of people’s online lives.”
“We’re backing that vision with important initiatives to create ‘wow’ experiences for our users,” she said in a statement.
After the report, which was released after regular trading closed, Yahoo shares lost 54 cents, or 3.2%, to $16.21.
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david.sarno@latimes.com
