Surprise! Apple Has Another Blowout Quarter

As has been the case for the past several quarters, iPhone and Mac sales propelled Apple to dazzling financial results in its fiscal second quarter. In its quarterly earnings call Tuesday, Apple said iPhone sales more than doubled during the quarter to 8.57 million units, while Mac sales were up 33 percent to 2.9 million units.

Although iPod sales were nearly flat at 10.9 million units, the iPhone and Mac numbers allowed Apple to once again proclaim Q2 -- which ended March 31 -- as its best non-holiday quarter ever.

Apple said its profit rose nearly 90 percent to $3.07 billion during the quarter, compared to $1.62 billion in the year-ago quarter. Apple earned $3.33 per share during the quarter, compared to $ 1.79 per share during last year's Q2. Revenue was up nearly 50 percent to $13.5 billion.

Apple investors did their best piranha impression in after hours trading Tuesday, sending Apple shares up $12.56 to $257.36 as of 4 p.m. PST. At the start of trading Tuesday, Apple shares had doubled in the past year from around $120 to $240.

Apple hasn't yet begun reporting revenue from sales of the iPad, which began on April 2. Oppenheimer said in the coming quarter iPad sales will be broken out in a similar fashion as the iPhone, as a line item that includes revenue from unit sales and related accessories.

In a Q&A session after the call, Apple COO Tim Cook was asked to comment on the iPad shortage. "It's a good kind of issue to have," Cook said in response. "Demand in the U.S. is much, much stronger than we predicted, and we regrettably had to push out the international launch to get enough Wi-Fi units in the U.S.," Cook said. "We're adding capacity and we'll see where it goes."

What is Apple doing with all this money? Squirreling it away, apparently. Apple CFO Peter Oppenheimer said Apple had $41.7 billion in cash at the end of Q2, compared to $39.8 billion at the end of Q1.

Apple paid $275 million to acquire mobile advertising firm Quattro Wireless in January, which will power Apple's forthcoming iAd service. But Oppenheimer said "preservation of capital" is Apple's investment priority right now due to the still-uncertain economy.

For Apple's upcoming June quarter, the company expects revenue between $13 and $13.4 billion, compared to $9.7 billion it realized in Q3 last year. Earnings per share are forecast in a range between $2.28 and $2.39, compared to the $2.01 Apple racked up in the year-ago quarter.

Gross margin is forecast to drop from 41.7 percent last year to 36 percent, due in part to stock based compensation but also due to Apple's aggressive iPad pricing. Apple sees the iPad as a new category of device and Cook suggested that its pricing reflects a desire to get out in front of the coming wave of tablets from competitors. "We think the market for the iPad will be large and we want to capitalize on our first mover advantage," Cook said.