Apple Reports $3.07 Billion Profit for Q2 2010, Best Non-Holiday Quarter Ever

121055 apple logo

Apple today announced financial results for the first calendar quarter and second fiscal quarter of 2010. For the quarter, Apple posted revenue of $13.50 billion and net quarterly profit of $3.07 billion, or $3.33 per diluted share, compared to revenue of $9.08 billion and net quarterly profit of $1.62 billion, or $1.79 per diluted share, in the year-ago quarter. Gross margin was 41.7 percent, compared to 39.9 percent in the year-ago quarter, and international sales accounted for 58 percent of the quarter's revenue. The numbers represent the best non-holiday quarterly revenue and earnings in Apple history.

Apple shipped 2.94 million Macintosh computers during the quarter, a unit increase of 33 percent over the year-ago quarter. Quarterly iPhone unit sales reached 8.75 million, up 131 percent from the year-ago quarter, and the company also sold 10.89 million iPods during the quarter, representing 1 percent unit decline over the year-ago quarter.

"We're thrilled to report our best non-holiday quarter ever, with revenues up 49 percent and profits up 90 percent," said Steve Jobs, Apple's CEO. "We've launched our revolutionary new iPad and users are loving it, and we have several more extraordinary products in the pipeline for this year."

Apple's guidance for the third quarter of fiscal 2010 includes expected revenue of $13.0 billion to $13.4 billion and earnings per diluted share of $2.28 to $2.39.

Apple will provide live streaming of its Q2 2010 financial results conference call at 2:00 PM Pacific, and MacRumors will update this story with coverage of the conference call highlights.

Update: Apple's stock, trading of which was temporarily halted for the earnings release, immediately leapt by over $19.00 (~8%) per share upon the resumption of trading, and is currently up approximately $17.00 (7%).

Conference Call Highlights:
- CFO Peter Oppenheimer giving overview of quarterly results, notes that PC industry grew 24% year-over-year, while Mac grew 33%.
- Breaking out iPod results, iPod touch grew 63% year-over-year, with iPod revenue up 12%. Apple maintains over 70% share of MP3 player market.
- iTunes Store brought in $1.1 billion, with over 4 billion App Store downloads so far.
- Thrilled with iPhone sales, 8.75 million is most ever. Growing at three times the overall market rate.
- Very happy with iPad sales so far. 3G on track for April 30th in U.S. Nine more countries coming in late May.
- Retail store sales up 22%, and 50% of retail store Mac purchasers continue to be new to Mac.
- Apple on track to open 40-50 new stores this fiscal year.

Q&A
Q: What insights have you gained in the U.S. market in terms of iPad cannibalization of Mac sales.
A: In our view, for last quarter, there was no obvious impact on the iPod or Mac sales from the iPad. We're thrilled with the sales of the iPad. An overall great start.

Q: iPad 3G vs Wi-Fi breakdown?
A: Too early to tell, since they haven't both been available.

Q: Why were the iPhone sales so good?
A: We had staggering growth rates in some areas. Asia, Japan, Europe growth rates were enormous. Some of this was adding additional carriers in some key countries. Also some other carries in key countries in Asia. But also had strong performance with existing carriers.

Q: Production problems with iPad?
A: No production issues. Demand simply much larger in U.S. than expected. We're adding capability, and we'll see where this thing goes.

Q: Thoughts on potential for iAd profitability?
A: Don't expect much from us this calendar year. We're building a foundation for the future.

Q: Thoughts about iPhone distribution?
A: Three main markets where still exclusive: U.S., Germany, Spain. We've moved a number of markets to non-exclusive and seen unit sales and market share improve. Can't say that will work everywhere though.

Q: iPad's effect on gross margin?
A: We priced it very aggressively at first to appeal to what is expected to be a huge market. Costs will come down over time.

Q: Plans for retail stores in China?
A: Very excited about China. Planning 25 stores there by end of 2011, starting with two in Shanghai this summer.

Q: Legal costs seem to be escalating with patent disputes. Any effect on bottom line?
A: We've taken it into account.

Q: Any plans for Apple TV?
A: Units were up 34%, but absolute number of units still small. Still a hobby. Comparing the Apple TV's small market to that of Mac, iPhone, iPod.

Q: Does the iPad compete with netbooks?
A: It's a no-brainer that someone would opt for the iPad over the netbook. The netbook doesn't do anything well.

Q: Any planned drop in iPhone service plan prices?
A: Apple always works to get the best deal for consumers, but price isn't everything. When we dropped iPhone 3G to $99, we still saw demand skewing toward iPhone 3GS starting at $199.

Q: How about accessories and their effect on gross margin?
A: Our portfolio of accessories is good and more coming for iPad. Devs are rallying around them, and more good stuff will probably be coming.

Q: Retail growth driven by new store openings?
A: Revenue per store up 8%. Same-store Mac sales up 20%. We think iPad is great opportunity for retail store sales.

Q: How will iPad be reflected in financial reports?
A: Will be a separate line item like the iPhone.

Q: How many iPad customers are new to Apple?
A: It's still early, and we don't really trust the data yet.

Q: Education sales outlook?
A: We're holding up in market share and ready to compete, but budgets are difficult right now.

-End of call

Popular Stories

Tim Cook Rainbow

Apple Event in October? Here's What to Expect

Monday September 29, 2025 9:31 am PDT by
Apple's annual iPhone event is in the rearview mirror, but rumors suggest the company plans to release a handful of additional products before the year ends. Will there be another Apple event this October? We discuss the possibility below. Apple in October Apple's most recent October events were in 2021 and 2023. In 2022 and 2024, Apple did not host an October event. Instead, it...
apple wallet drivers license feature iPhone 15 pro teal 1

Apple's iPhone Driver's License Feature Now Available in 11 U.S. States

Tuesday September 30, 2025 6:40 am PDT by
In select U.S. states, residents can add their driver's license or state ID to the Wallet app on the iPhone and Apple Watch, providing a convenient and contactless way to display proof of identity or age at select airports and businesses, and in select apps. Apple recently revealed that the feature would soon be available in North Dakota, and starting today, the feature has officially gone...
maxresdefault

New iPad Pro With M5 Chip Leaked in Unboxing Video

Tuesday September 30, 2025 8:39 am PDT by
An apparent unboxing video for an unannounced iPad Pro with the M5 chip was uploaded to YouTube today by Russian channel Wylsacom. The same YouTube account leaked the 14-inch MacBook Pro with the M4 chip before it was announced by Apple last year, so this is likely a legitimate leak. Based on the box shown in the video, this appears to be a 13-inch iPad Pro with an M5 chip, 256GB of...
fcc vision pro leak

FCC Accidentally Leaks Apple's Next Vision Pro

Tuesday September 30, 2025 3:48 pm PDT by
The United States Federal Communications Commission (FCC) has seemingly confirmed Apple's work on an updated version of the Vision Pro headset. One of several documents the FCC shared today references an Apple-designed "Head Mounted Device" with a model number of A3416. An included image confirms the device is a Vision Pro. The FCC's uploads are transmission tests, SAR test reports, and...
iOS 26

Apple Releases iOS 26.0.1 With Fixes for Wi-Fi, Cellular, and Camera Issues on iPhone 17 Models

Monday September 29, 2025 10:12 am PDT by
Apple today released iOS 26.0.1 and iPadOS 26.0.1, the first updates to the iOS 26 and iPadOS 26 operating systems that came out earlier this week. The new software can be downloaded on eligible iPhones and iPads over-the-air by going to Settings > General > Software Update. According to Apple's release notes for the update, iOS 26.0.1 addresses a bug that could cause aberrations in...
macbook pro prime day 2025

FCC Leaks Upcoming MacBook Pro and More

Tuesday September 30, 2025 1:58 pm PDT by
The United States Federal Communications Commission has confirmed Apple's work on a new version of the MacBook Pro and several other products, leaking details on the devices ahead of launch. The FCC published documents that reference model numbers that do not correspond with existing devices. A3434, for example, references an unreleased MacBook Pro, while other numbers are likely for...
space black mbp

Here's Every New Apple Product That Leaked Yesterday

Wednesday October 1, 2025 8:27 am PDT by
A handful of upcoming Apple products leaked yesterday, through a combination of YouTube videos out of Russia and U.S. Federal Communications Commission (FCC) documents that were released, despite Apple's confidentiality requests. The leaked products include an iPad Pro with an M5 chip, as well as updated MacBook Pro and Apple Vision Pro models. All of these devices had already been rumored...
Apple MacBook Pro M4 hero

New MacBook Pro Nears Mass Production, But Four Bigger Upgrades Expected Next Year

Sunday September 28, 2025 2:08 pm PDT by
Apple's next MacBook Pro models will enter mass production soon, according to the latest information shared by Bloomberg's Mark Gurman. In his Power On newsletter today, Gurman said he continues to believe the new MacBook Pro models will be released at some point between late 2025 and the first quarter of 2026, meaning they should be available to order by March at the latest. Apple often...
iOS 26

Apple Continues to Prepare iOS 26.0.1 With Multiple Bug Fixes Expected

Sunday September 28, 2025 1:30 pm PDT by
Apple is preparing to release iOS 26.0.1, according to a private account on X with a proven track record of sharing information about future iOS versions. The account initially said iOS 26.0.1 would have a build number of 23A350, but they now expect the update to have a build number of 23A355. This suggests that the software update will include more bug fixes or changes than initially...
Home Hub Command Center with Dome Base Feature

Apple Working on All-New Operating System

Thursday September 25, 2025 1:11 pm PDT by
Apple is developing an all-new operating system codenamed "Charismatic," according to Bloomberg's Mark Gurman. Apple smart home hub concept based on rumors This is likely Apple's long-rumored "homeOS" operating system. In a report last month, Gurman said both Apple's rumored smart home hub in 2026 and tabletop robot in 2027 will run the new operating system. He said the software platform ...