Apple Inc. said its profit jumped 26 per cent in its fourth quarter as the newest iPhone outsold the market-leading BlackBerry from Research in Motion Ltd.
Despite the blockbuster performance, which sent Apple's shares soaring in after-hours trading, the company issued what it called "prudent" predictions for the current quarter, because of broader economic uncertainty.
For the three months ended Sept. 27, Apple's profit climbed to $1.14 billion, or $1.26 per share, from $904 million, or $1.01 per share in the same period last year.
Sales jumped 27 per cent to $7.9 billion from $6.22 billion in the year-ago quarter.
Cupertino, Calif.-based Apple's profit topped Wall Street's expectations, but sales missed. Analysts had expected the company to sell $8 billion worth of Macintosh computers, iPods, iPhones and other gadgets, for a profit of $1.11 per share, according to a Thomson Reuters poll.
On a conference call with analysts, chief executive Steve Jobs addressed concerns that economic weakness will eat into Apple's business through the holidays and beyond.
Jobs said Apple's customers are more likely to put off buying a new computer than to defect to other brands of PCs with lower prices. Apple, which is sitting on about $25 billion in cash, could use the downturn to invest in research and development, he said.
"We may get buffeted around by the waves a little bit, but we'll be fine," Jobs said.
Apple sold a staggering 6.9 million of its iPhone 3Gs in the quarter, more than the 6.1 million total first-generation iPhones sold. The iPhone launched July 11 and is available in more than 50 countries.
Research in Motion reported it sold 6.1 million BlackBerry smart phones in the quarter that ended Aug. 30.
Edward Jones analyst Bill Kreher said overtaking RIM in such short order was a "tremendous accomplishment."
"It's jaw-dropping," Kreher said.
Apple also set quarterly records for Macintosh and iPod sales. Apple said it sold 2.6 million Macs and 11.1 million iPods, further allaying fears that the sluggish economy would weigh on Apple's back-to-school sales.
Record notwithstanding, the Mac division dragged Apple's revenue below the Street view. The company said Mac sales growth took a hit as educational institutions cut back on computer purchases.
For the current quarter, which ends in December, chief financial officer Peter Oppenheimer gave a wide range he described as "prudent," saying Apple expects to earn $1.06 to $1.35 per share on sales from $9 billion to $10 billion. Analysts surveyed by Thomson Reuters had been expecting a profit of $1.65 per share on sales of $10.57 billion.
Piper Jaffray analyst Gene Munster, speaking in an interview, called the guidance Apple issued "comical," saying it calls for results that are flat from a year ago and ignores the explosive iPhone 3G debut. "It's mathematically almost impossible," he said.
Shares of Apple fell $6.95, or 7.1 per cent, to close at $91.49. In extended trading after the earnings report, the stock leapt up $13, or 14.2 per cent, to $104.49.
For the full financial year, Apple's profit climbed 38 per cent to $4.83 billion, or $5.36 per share. Revenue increased 35 per cent to $32.5 billion.
