CEO Steve Jobs said he was ‘thrilled to report our best quarter ever, with the highest revenue and earnings in Apple's history.’ This was partly thanks to sales of its iMac computers and partly due to the huge success of the iPhone, which has already shifted about 2.3m units despite costing an arm and a leg. This took Apple’s quarterly profits to$1.58bn, up from $1bn last year, on sales of $9.6bn.
You might think this sounds like a pretty strong quarter. Both revenue and profit figures were well above analysts’ forecasts. Apple’s products flew off the shelves across the board – it shipped 2.3m Macs, 44% more than a year ago (a growth rate 2.5 times faster than the market as a whole) and also sold more than 21m iPods (we’re surprised that there were 21m people left in the world without iPods – perhaps people have started buying a spare?)
However, there was also a sting in the tale. Last year customers may have been willing to fork out for expensive phones and laptops, but this year could be a different story, with retail confidence dwindling on both sides of the Atlantic. Apple’s sales forecasts were lower than expected, and that sent its share price plummeting during after-hours trading. When New York finally opened for business this afternoon, it dropped by about 13% - and for a company of Apple’s size, that stings. Within half an hour of the opening bell, the technology giant was worth nearly $20bn less than it was on Tuesday.
Apple is notorious on Wall Street for under-playing its profit forecasts – after all, that’s the best way to make sure you keep beating them – and it doesn’t usually lose $20bn in value. But given the jitters in the market at the moment, and given Apple’s status as a bellwether for the technology sector, it was the worst possible news at the worst possible time.
Now Steve Jobs will be banking on his latest set of products – including the ultra-thin MacBook Air and iTunes movie rentals – will be able to prove the doubters wrong and keep Apple’s figures flying high. On the evidence of the last few years, we wouldn’t bet against him...