HITS Daily Double
“Even though they weren’t specific, that level of excitement potentially foreshadows exciting products to come.
——analyst A. M. Sacconaghi on the demeanor of Apple execs during conference call


Amid Brutal Economic Climate, the Company Posts the Second-Best Quarter in Its History
What recession? And who is Steve Jobs?

Apple has totally bucked the economic downturn and more than survived the boss’ leave of absence, posting a 15% increase in quarterly profit as millions of iPods (11m) and iPhones (3.8m) flew out the doors. Those robust sales fueled the second-best quarter in the company’s history, and its best March ever.

Revenue rose 8.7% to $8.16 billion for its fiscal Q2, which ended March 28, while its profit increased to $1.21 billion (or $1.33 a share) from $1.05 billion (or $1.16 a share) year over year. Apple’s gross profit margin rose to 36.4% from 32.9%.

Ironically, the economy actually enhanced Apple's quarterly profit because product components like aluminum, microprocessors and memory chips went down in cost.

As for Jobs, "We look forward to Steve returning to Apple at the end of June," said CFO Peter Oppenheimer during Wednesday’s conference call.

That 3.8 million iPhone total was more than double sales in the year-ago quarter—and that with a next-gen model expected in the next few months. On the iPod side, sales were paced by the Touch and the redesigned Shuffle, which is now smaller than the head of a pin. No, not really.

The only rain on Apple’s parade was a drop in Mac sales, which hadn’t happened in nearly six years. The decline was 3% in terms of units and 16% by revenue.

Despite the upbeat news, Apple once again played it close to the belt about its performance in the current quarter, projecting earnings lower than a year earlier, although it expects revenue to be a notch higher. "Forecasting in the current macroeconomic environment remains challenging," said Oppenheimer, just before chortling and fist-bumping Cook.

Analyst A. M. Sacconaghi of Sanford C. Bernstein & Co. remarked in the N.Y. Times about the high spirits evidenced by Oppenheimer and COO Tim Cook (who’s been running Apple during Jobs’ absence). “Their enthusiasm about their product portfolio is something investors care deeply about,” he said. “Even though they weren’t specific, that level of excitement potentially foreshadows exciting products to come. It is something investors care deeply about and get excited over.”

Shares were up nearly $3 to $124.50 as of 11:23 EDT.