The technology train is leaving the station, and Apple (NASDAQ: AAPL) is engineering the move yet again. This afternoon's announcement of Q2 results was impressive in a number of ways, even for a company like Apple that consistently sets the bar higher and higher.
Analysts, increasing their expectations almost daily it seemed leading up to today's announcement, were expecting Q2 revenues of $23.38 billion, equating to an average estimated earnings of $5.37 per share. Simply meeting these expectations would have meant obliterating year-over-year earnings. Though, AAPL rarely seems to do the expected anymore, and once again they did not disappoint.
Keeping in mind the projections above had been consistently raised these past couple of months; beating them at all would have been a coup. That being said, Apple's results are that much more impressive, earning $6.40 per share on sales of $24.67 billion for the quarter. The impetus for the results was an increase of 83% in sales year-over-year. It doesn't take a CFO to figure out that when you nearly double sales, there's a good chance of impressive earnings, and AAPL's doubling of profit in that same time frame is not unexpected.
There were a couple of glitches in this afternoon's call, though only one is of real concern, and that is somewhat minor. The company sold about 1.6 million few iPads during the quarter than analysts expected, totaling 4.69 units vs. the 6.3 million expected. The reason this is not too disconcerting is was the result of supply issues, not demand. As CFO Peter Oppenheimer noted, "We sold every iPad 2 we were able to make this quarter." That should help to lessen the blow for investors. And, as it happens, it seems to have done just that with after hours trading bumping Apple share up over 4% as of this writing, to $342.21 a share.
Offsetting a 113% year-over-year increase in iPhone sales, and a 32% increase in sales of Mac computers, was the somewhat disappointing 17% drop in iPod unit sales over the same period last year. With so much to feel good about, it almost seems silly to spend too much time discussing the continued slowing in the iPod business, but it is a reality. Though, making up for the loss of revenue from this product line doesn't appear to be too difficult for the bellwether of the IT industry.
As is often the case when an industry leader announces terrific earnings results, others of the same ilk can and will ride the wave. As discussed in earlier articles, exploring other up-and-comers in the computer/IT industry makes a lot of sense right now, particularly for investors interested in short term investment opportunities.
