Apple Inc. (NASDAQ: AAPL) is scheduled to release its fiscal first-quarter financial results after the closing bell on Tuesday, January 18, 2011. Analysts, on average, expect the company to report earnings of $5.29 per share on revenue of $24.12 billion. In the year ago quarter, the company reported earnings of $3.67 per share on revenue of $15.68 billion.
Apple Inc., together with subsidiaries, designs, manufactures, and markets personal computers, mobile communication and media devices, and portable digital music players, as well as sells related software, services, peripherals, networking solutions, and third-party digital content and applications worldwide. Apple has beaten estimates for 31 straight quarters.
In the preceding fiscal fourth-quarter, the Cupertino, California-based company's net income was $4.31 billion, or $4.64 per share, compared to $2.53 billion, or $2.77 per share, in prior-year quarter. Revenue jumped 67% to $20.34 billion from $12.21 billion in the same quarter last year. Analysts, on average, expected the company to report earnings of $4.06 per share on revenue of $18.86 billion. Gross margin for the fourth quarter dropped to 36.9% from 41.8% in the prior year quarter, while operating margin for the quarter declined to 26.8% from 30.1% a year earlier. IPhone sales soared 91% to 14.1 million units. The company sold 4.19 million iPads during the fourth quarter.
At its last earnings call in October, Apple said that it expects fiscal first-quarter earnings of $4.80 per share on revenue of $23 billion. The company expects gross margins of 36.0%, reflecting approximately $52 million related to stock-based compensation expense. Operating expenses are expected to be $2.33 billion, including about $250 million related to stock-based compensation, while Other Income and expenses are projected to be about $65 million. Late in October, Apple said in a regulatory filing that gross margins in future periods will likely slip below previous levels as the company focuses on higher end products that cost more to produce.
Apple continues to make innovative devices which appeal to consumers in a big way. The company is expected to post strong profit and revenues in the latest quarter, benefiting from the sales of its tablet computer iPad as well as the latest version of its wildly popular smartphone, iPhone 4. Their iPhone sales are nowhere near their maturity and are still in the growth phase. The iPads are just in their infancy. The Mac too is on the move, taking market share from the Windows crowd quarter after quarter. Sales of Macs rose +26% in the most recent quarter compared with a year ago, while the PC sector grew less than +10%.The solid performance of Apple's fast-expanding store base also provides a positive feedback loop in terms of attracting new customers. Apple’s push into ads and TV could become big new sources of growth. The solid performance of Apple's fast-expanding store base also provides a positive feedback loop in terms of attracting new customers.
Several rival electronics makers are readying their own tablets for the marketplace, including Samsung, Dell Inc. (NASDAQ: DELL) , Hewlett-Packard Co. (NYSE: HPQ) and Research In Motion Ltd. (NASDAQ: RIMM), maker of the rival BlackBerry smart phone. “We think all of these tablets are going to be DOA — dead on arrival,” Jobs declared in October, adding that rival devices have smaller screens and lack the 30,000 apps available for the iPad.
Among other developments, Apple's operating system iOS 4.2.1 was released on November 22 with support for all Apple A4 devices, 3rd, and 2nd generation devices, with the exclusion of the Apple TV. On December 14, Apple released a new version of Apple TV (version 4.1.1), with features such as enhanced TV resolution.
Looking ahead to 2011, analysts expect Apple to introduce the long-awaited CDMA iPhone for Verizon customers as well as a new second generation iPad, the iPad 2.
In terms of stock performance, Apple shares have gained nearly 55 percent over the past year.
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