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

Top Stories

16inchmacbookpromain

Kuo: New MacBook Pro Models to Feature Flat-Edged Design, MagSafe, No Touch Bar and More Ports

Thursday January 14, 2021 9:32 pm PST by
Apple is working on two new MacBook Pro models that will feature significant design changes, well-respected Apple analyst Ming-Chi Kuo said today in a note to investors that was obtained by MacRumors. According to Kuo, Apple is developing two models in 14 and 16-inch size options. The new MacBook Pro machines will feature a flat-edged design, which Kuo describes as "similar to the iPhone 12" ...
iphone x camera close

iOS 14.4 Will Introduce Warning on iPhones With Non-Genuine Cameras

Thursday January 14, 2021 8:07 am PST by
In the second beta of iOS 14.4 seeded to developers and public testers this week, MacRumors contributor Steve Moser has discovered code indicating that Apple will be introducing a new warning on iPhones that have had their camera repaired or replaced with aftermarket components rather than genuine Apple components. "Unable to verify this iPhone has a genuine Apple camera," the message will...
prototype iphone 12 pro

Prototype iPhone 12 Pro Shown Off in Photos

Wednesday January 13, 2021 3:39 pm PST by
Developer Giulio Zompetti, who often shows off prototype versions of Apple devices, today highlighted a prototype version of the iPhone 12 Pro. The iPhone 12 Pro is running an operating system called SwitchBoard, a nonUI version of the iOS 14 update that Apple uses internally. We've seen SwitchBoard on prototype devices before, as Apple uses it to test new features. Zompetti's prototype...
foldable iPhone concept feature

Apple Testing In-Display Fingerprint Sensor for iPhone 13, Foldable iPhone Also in the Works

Friday January 15, 2021 1:46 pm PST by
Apple has started "early work" on an iPhone that has a foldable display, according to a new report from Bloomberg's Mark Gurman. Though testing of a foldable iPhone has begun, Apple has not committed to releasing a device that has a foldable display. Development has not yet expanded beyond a display and Apple does not have full foldable iPhone prototypes in its labs. Like foldable...
Apple TV Ray Light 2 Triad

Apple Extends Free Apple TV+ Trials Until July

Friday January 15, 2021 10:50 am PST by
Apple is once again planning to extend its free Apple TV+ trial subscriptions, this time until July. When Apple TV+ launched in November 2019, Apple offered free Apple TV+ subscriptions to those who purchased a new Apple device in or after September 2019. Those free subscriptions were set to expire in November 2020, but in October 2020, Apple announced that it was extending free trials...
macbook pro 16 inch thunderbolt

Bloomberg: Next-Generation MacBook Pro to Offer Improved Displays, Faster Charging Over MagSafe

Thursday January 14, 2021 11:36 pm PST by
Following today's report from analyst Ming-Chi Kuo outlining major changes for the next-generation MacBook Pro models coming in the third quarter of this year, Bloomberg's Mark Gurman has weighed in with his own report corroborating some of the details but seemingly differing a bit on others. First, Gurman shares more details on the return of MagSafe charging to the MacBook Pro, indicating...
Hue module dimmer switch

Philips Hue Announces New Wall Switch Module, Dimmer Switch, and Outdoor Light Bar

Thursday January 14, 2021 3:11 am PST by
Philips Hue has announced a new wireless dimmer switch module that lets Hue bridge owners directly control the smart lighting from their standard wall switches. The new Philips Hue wall switch module is the ideal addition to any Philips Hue set up. Installed behind existing light switches, it allows users to turn their existing switch into a smart switch and ensures their smart lighting is...
pat gelsinger intel

Incoming Intel CEO Derides Company's Inability to 'Deliver Better Products' Than Apple's M1 Chip

Friday January 15, 2021 6:17 am PST by
Incoming Intel CEO Pat Gelsinger has said that the company must "deliver better products" than Apple, which he described as a "lifestyle company," and says that Intel's best days are "in front of it" (via The Oregonian). Speaking at an Intel all-hands meeting yesterday, Gelsinger derisively implied that Apple is merely a "lifestyle company," so Intel must be able to surpass its technology: ...
mac pro mini feature

Apple Working on Two New Mac Pro Desktops, One of Which Will Be Reminiscent of Power Mac G4 Cube

Friday January 15, 2021 10:23 am PST by
Apple is developing two versions of the Mac Pro to succeed the Mac Pro that was first released in December 2019, according to a new report from Bloomberg. The first updated Mac Pro is a direct successor to the current Mac Pro and it will use the same design. It may also be equipped with Intel processors rather than Apple silicon chips, and it could be one of the sole machines in the Mac...
pioneer carplay wc5700nex

The Best Apple-Related Accessories at CES 2021

Wednesday January 13, 2021 1:16 pm PST by
CES 2021 is taking place digitally this year, and it hasn't been as exciting as in past years because many vendors have opted out. That said, some companies are still showing off some interesting Apple-related accessories that are coming out this year and that will be of interest to Mac, iPad, and iPhone users. Subscribe to the MacRumors YouTube channel for more videos. Pioneer Wireless...