Apple Inc. (NASDAQ: AAPL) is scheduled to release fiscal third-quarter earnings after the closing bell on Tuesday, July 20, 2010. Analysts, on average, expect the company to report earnings of $3.07 per share on revenue of $14.62 billion. In the year-ago period, the company posted earnings of $2.01 per share on revenue of $8.34 billion.
Apple Inc., together with subsidiaries, designs, manufactures, and markets personal computers, mobile communication devices, and portable digital music and video players, as well as sells various related software, services, peripherals, and networking solutions.
In the preceding second-quarter, the Cupertino, California-based company reported that its net income jumped 90% to $3.07 billion, or $3.33 per share, from $1.62 billion, or $1.79 per share, in the prior-year quarter. Revenue jumped 49% to $13.5 billion. Analysts, on average, expected the company to report earnings of $2.45 a share on revenue of $12.04 billion. Gross margin for the quarter improved to 41.7% from 39.9% in the year-ago quarter. Apple sold 8.75 million iPhones for the quarter, representing 131 percent unit growth over the year-ago quarter. iPod sales dropped 1% to 10.89 million units during the quarter. The company sold 2.94 million Macintosh computers during the second quarter, representing a 33 percent unit increase over the year-ago quarter.
In April, Apple said that it anticipates third-quarter earnings in the range of $2.28 to $2.39 per share and revenue in the range of $13 billion to $13.4 billion. The company is famously conservative when it comes to guidance.
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. Last month, Apple Inc. said that it sold three million iPad in 80 days, since its launch in the US. It took Apple 28 days to sell the first million. On June 7, Apple Chief Executive Officer Steve Jobs unveiled the new iPhone 4 that is claimed to be thinner and faster than earlier versions of the device, and was available for sale from June 24. The company sold 1.7 million iPhone 4s in its first three days, marking the strongest sales debut for an iPhone yet.
However, Apple has come under considerable criticism for technological problems with its latest iPhone. Recently products review magazine Consumer Reports said that it will not recommend Apple Inc.'s iPhone 4 due to reception problems caused by the device's antenna design. Apple had earlier said that the reception problems reported about the iPhone 4 actually stemmed from wrong display of the number of bars of signal strength. The company said that it will issue a free software update in a few weeks to fix the problem. However, Consumer Reports said that the main problem appears to be in the design of the device itself.
Among other developments, Apple officially launched its iAd mobile advertising network on July 1 on iPhone and iPod touch devices running iOS 4 software platform. The company stated last month that it has iAd commitments for 2010 totaling over $60 million.
In terms of stock performance, Apple shares have gained over 17% since the beginning of the year. Late in May, Apple reached a major milestone when the company's market capitalization surpassed that of Microsoft for the first time, making it the world's biggest technology company by market capitalization.
Disclosure: Author doesn't own any of the stocks discussed here.
