Apple Inc. said robust demand for the iPhone in China fueled a 94 percent surge in its quarterly profit, allaying the growth concerns that had sliced the company’s shares by 12 percent since April 9.
Net income in the fiscal second quarter climbed to $11.6 billion, or $12.30 a share, as sales rose 59 percent to $39.2 billion, Apple said late Tuesday.
Analysts had predicted profit of $10.02 a share on revenue of $36.9 billion, according to data compiled by Bloomberg.
Demand from Chinese consumers helped Apple sell a higher-than-predicted 35.1 million iPhones last quarter and made the world’s most populous country responsible for 20 percent of sales, up from 12 percent last year. Chief Executive Officer Tim Cook said there will be “a lot more opportunity” in China as he introduces the iPad and expands operations there.
“They are truly just beginning to grow in Asia, and China is possibly their most important market, where they just really started expanding,” said Michael Obuchowski, chief investment officer at First Empire Asset Management in Hauppauge, N.Y., which manages about $4.5 billion, including Apple shares. “For Apple right now, the most important part of thinking about their business is the international growth.”
The company sold 11.8 million units of the iPad, which was updated last month to include a high-definition screen and faster processor. Apple has sold 67 million iPads since the device’s 2010 debut. It took the company 24 years to reach that milestone with the Mac computer, Cook told analysts.
Analysts surveyed by Bloomberg on average predicted Apple would sell 11.9 million iPads and 31.2 million iPhones.
Apple also benefited from reined-in costs and lower component prices. Gross margin, the percentage of sales remaining after deducting costs of production, was 47.4 percent, compared with 41.4 percent a year earlier.
“This report should erase any doubt in investors’ minds that this company can’t continue to deliver,” said Jack Ablin, chief investment officer of Harris Private Bank in Chicago, which oversees about $60 billion, including Apple shares.
The results added to evidence of a rebound in some pockets of the economy that buoyed results for other technology bellwethers. Microsoft Corp., the top software maker, last week reported better-than-expected corporate purchases of computers, while Texas Instruments Inc., the biggest maker of analog chips, this week indicated robust demand for a range of electronics. International Business Machines Corp, the biggest computer-services provider, also reported higher profit.
Looking ahead to results for the current quarter, Apple forecast revenue of about $34 billion and profit of $8.68 a share. That compares with average analysts’ predictions for sales of $37.5 billion and profit of $9.96 a share.
Apple doesn’t intend to follow the lead of Microsoft, which is introducing a new operating system that will run on smart phones, tablets and personal computers. The company said users prefer to have different experiences on mobile devices and PCs.