Apple forecast beats Street view
SAN FRANCISCO (Reuters) - Apple Inc gave an unusually upbeat revenue forecast that exceeded Wall Street's expectations and eased fears that the controversy around its iPhone 4 reception would hurt sales, boosting its shares 2 percent.
A surprisingly large spike in Mac computer sales beefed up Apple's June-quarter earnings, helping silence criticism over its handling of complaints about a faulty antenna on the latest iPhone model. A defiant Chief Executive Steve Jobs has called poor smartphone reception an industrywide problem.
"This is one of the few times in recent memory that Apple's guidance has been ahead of the Street, at a time when investors were getting concerned the iPhone 4 antenna issues could hamper sales," said Oppenheimer & Co analyst Yair Reiner. "Apple's sending a strong signal it sees things differently."
Although the iPhone and iPad, launched in January, generated most of the headlines for Apple, it was the Mac computer that helped make the quarter for the company.
Apple said on Tuesday it sold 3.47 million Macs in the fiscal third quarter ended June 26, up 33 percent from the year-ago period and better than the 3.2 million Wall Street had expected.
Investors will now focus on Apple's projected $18 billion in revenue for the current quarter, exceeding Wall Street's prediction of about $17 billion -- a rare upbeat forecast for a company notorious for its conservative outlook.
Chief Financial Officer Peter Oppenheimer repeatedly declined to say whether the "Antennagate" controversy had impacted sales of the iPhone 4, saying only: "We are not currently able to meet demand."
Complaints about the iPhone 4's reception surfaced soon after its release on June 28, with users saying that the wireless signal weakens drastically when the device is held in a certain way. Apple's shares fell about 8.4 percent in those 3 weeks through Monday.
"As good as the quarter was, the guidance was beyond robust," argued BGC Partners analyst Colin Gillis. "It was going to take a monster quarter to accelerate shares, and we got it."
Shares of Cupertino, California-based Apple closed up 2.6 percent at $251.89 on Nasdaq and rose to $259 in extended trading.
Apple reported net income for the fiscal third quarter of $3.25 billion, or $3.51 a share, up from $1.83 billion, or $2.01 a share, in the year-ago period.
Analysts on average were expecting earnings of $3.11 a share, according to Thomson Reuters I/B/E/S.
Revenue rose 61 percent to $15.7 billion, well ahead of Wall Street's forecast for $14.75 billion.
For the current quarter, it estimated earnings of $3.44 a share.
The high-margin iPhone is Apple's most important product line and yields 40 percent of its revenue. The company is embarking on an ambitious push to drive iPhone growth in overseas markets.
Apple sold 8.4 million of the smartphones in the June quarter, about what the Street had expected.
"These numbers will go a long way to make people forget about any antenna issues," said Edward Jones analyst Bill Kreher. "As media tension wanes, investors will start to focus more on long-term earnings power."