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Apple Reports Stellar Q1 2011 Financial Results

Apple posted its financial results for the company’s first financial quarter of 2011, which, by general accounting principles that laugh at your calendar and ours, ended on 25 December 2010. The news was, as expected, more than good: a quarterly profit of $6 billion ($6.43 per diluted share) on record revenue of $26.74 billion. This was more than $10 billion higher than the year-ago quarter’s revenues of $15.68 billion and almost twice the year-ago quarter’s profit of $3.38 billion. Apple closed the quarter with $59.7 billion cash on hand, an increase of $8.7 billion since last quarter.

And what about the products? An impressive 4.13 million Macs were sold (a year-over-year increase of 23 percent); 16.24 million iPhones reached customers this quarter (an increase of 86 percent from a year ago); and 19.45 million iPods went out the door (a decline of 7 percent from last year). Apple also sold 7.33 million iPads during the quarter, producing enough revenue—$4.61 billion—for the tablet to become the second-largest revenue-producing product line in Apple’s portfolio. All told, Apple has sold over 160 million iOS devices and would have sold more—especially iPhones—if they could have made them quickly enough.

Worldwide, Apple has been on a juggernaut-scale roll, with revenue growth occurring everywhere: the Americas saw a 51 percent increase; Europe saw growth go up 44 percent; Japan increased revenues by 83 percent, and Asia-Pacific dominated all other regions with a 175 percent increase. One of the reasons for that last staggering figure is Apple’s recent focus on China: revenue growth for “greater China” (mainland, Hong Kong, and Taiwan) increased fourfold over the previous year’s figures.

Given the information above, it should be no surprise that Apple Stores saw continued success last quarter as well. Average revenue per store was $12 million, up 69 percent, resulting in more than $1 billion in profits from the retail segment. As has been reported quarter after quarter, about half of in-store Mac sales were to new customers.

Apple’s guidance for the current quarter was traditionally low-key: Apple expects to see earnings per share of $4.90.

The Q&A session of the financial results phone call was satisfyingly devoid of questions concerning the health of the company’s CEO. One questioner asked if Apple saw the iPad cannibalizing their own Mac sales. Apple’s Tim Cook responded that there has been some, but there is also a halo effect with iPad and other iOS device sales driving Mac sales, especially in Asia-Pacific and Japan markets; Cook noted that “if this is cannibalization, it feels pretty good.”

When asked to comment on the competitive landscape regarding tablet computers, Cook responded that most iPad competitors weren’t shipping yet, and said that Apple had a huge first-mover advantage and was not sitting still. In response to a question about the consumerization of business technology, Cook pointed out that some people could now run a business just on an iPhone or iPad and said that Apple was “just scratching the surface right now.”

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