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

airpodsinear 1

AirPods Save Woman's Life With Feature Everyone Should Know

Friday January 21, 2022 2:13 am PST by
Apple's AirPods have been credited with saving a woman's life after a potentially fatal fall, People reports. When a 60-year-old florist in New Jersey tripped and hit her head in her studio, she lost consciousness and awoke heavily bleeding. With nobody around to call for help, she realized she had her AirPods in, and used a "Hey Siri" command to call 911. An operator was able to stay on the ...
Upcoming Products 2022 Feature

Gurman: Apple Preparing 'Widest Array of New Hardware Products in Its History' for Fall

Sunday January 23, 2022 10:32 am PST by
Apple is working on a number of new products that are set to launch this fall, and Bloomberg's Mark Gurman says that it will be "the widest array" of new devices that Apple has introduced in its history. In his latest "Power On" newsletter, Gurman explains that Apple is working on four new flagship iPhones (iPhone 14, iPhone 14 Max, iPhone 14 Pro, and iPhone 14 Pro Max), an updated low-end Ma...
Questionable Design Decisions

Apple's Most Questionable Design Decisions in Recent Memory

Sunday January 23, 2022 2:59 am PST by
Apple has always emphasized the depth of thought that goes into the design of its products. In the foreword to Designed by Apple in California, a photo book released by the company in 2016, Jony Ive explains how Apple strives "to define objects that appear effortless" and "so simple, coherent and inevitable that there could be no rational alternative." But every once in a while even Apple...
top stories 2022jan22

Top Stories: Spring Apple Event Rumors, Apple Opposes Sideloading, and More

Saturday January 22, 2022 6:00 am PST by
As we roll into the latter half of January, we're starting to hear more about a potential spring Apple event, which is likely to take place in March or April. There are a number of potential announcements on deck, so an event would be a good opportunity for Apple to get them all out there. We've also been going back and forth on some iPhone 14 rumors, and we've taken a look at a number of...
att gigabit internet

AT&T Bringing $180/Month 5-Gigabit Internet to 70 Cities

Monday January 24, 2022 9:20 am PST by
AT&T today announced the launch of upgraded AT&T Fiber plans, which support speeds of up to 5 Gigabits for some customers. There are two separate plans, one "2 GIG" plan and one "5 GIG" plan, available to new and existing AT&T Fiber subscribers. According to AT&T, the new plans are available to nearly 5.2 million customers across 70 metro areas including Los Angeles, Atlanta, Chicago, San...
macbook pro 14 16 2021

Three Months After Launch, Apple Still Struggling to Meet Demand for Redesigned 14-Inch and 16-Inch MacBook Pro

Monday January 24, 2022 7:12 am PST by
Three months after their launch, the 14-inch and 16-inch MacBook Pros continue to experience high demand and seemingly short supply, with shipping dates for both models stretching into multiple weeks in several of Apple's key markets. In the United States, the baseline 14-inch MacBook Pro with the M1 Pro chip is estimated to ship in three to four weeks, promising an arrival by at least...
peloton tv workout cardio

Apple Floated as Potential Buyer of Peloton

Friday January 21, 2022 6:11 am PST by
Following months of bleak news about Peloton's "precarious state," including the revelation that it has halted production of its bikes and treadmills, Apple is being floated as a potential buyer of Peloton's troubled fitness business. Yesterday, CNBC reported that Peloton will temporarily stop production of its connected fitness products due to a "significant reduction" in consumer demand, a ...
Spring 2022 Apple Products Feature

New iPad Air, Macs, and iPhone SE With 5G Likely to Be Announced at Apple Event This Spring

Thursday January 20, 2022 8:32 am PST by
Earlier this week, Bloomberg's Mark Gurman tweeted that Apple "will be holding a spring event" to announce a new iPhone SE and other hardware. In a recent edition of his newsletter, Gurman said the event is likely to occur in March or April. Gurman did not elaborate on what "other hardware" will be announced at Apple's purported spring event, but rumors suggest at least four products are...