Apple posts Q2 results, beats revenue estimates by half a billion (UPDATE)

Apple has released its fiscal Q2 financial results after the markets' close today. The company posted revenue of $7.5 billion and profits of $1.05 billion, beating analyst estimates by far.

Apple's revenue grew 43% over the same quarter last year, mainly thanks to very strong Mac sales of 2.29 million units up as much as 51% since last year. Mac sales have been helped by the introduction of the MacBook Air in January and a competitive notebook and desktops lineup.

The company also sold 10.64 million iPods (up 1% year over year) and 1.7 million iPhones, in line or slightly higher than analysts' consensus.

"We're delighted to report 43 percent revenue growth and the strongest March quarter revenue and earnings in Apple's history. With over $17 billion in revenue for the first half of our fiscal year, we have strong momentum to launch some terrific new products in the coming quarters." said Steve Jobs, Apple's CEO.

Guidance for next quarter is a sequentially lower revenue of $7.2 billion and profits of about $1.00 per share.

A conference call on Apple's Q2 financial results will be held in half an hour. MacScoop will cover this financial conference call as foot note of this story, so stay tuned.

Conf call coverage:
- Peter Openheimer summarizes results
- Macs products & services 59% of the revenue, 3,5 times the overall PC growth.
- Desktops up 37%, notebooks up 61%, very good customer response to the MacBook Air
- iPod shuffle sales down but boosted by price reduction
- iTunes sales: Apple surpassed Wallmart, 50 million customers, 85% of U.S. market share, movie-rental well received by customers, more countries to get movies.
- iPhones: Still targeting 10 million sales in calendar 08, $1.93 billion of revenue this quarter from iPhone and Apple TV.
- Apple stores average revenue of $7.1 million up from $4.8 million a year ago (+48%), $334 million total revenue.
- New stores in Australia, China and Switzerland in the coming months
- 32.9% of margin, expected 33% next quarter
- $1 billion cash generated this quarter
- Q/A :
32.9 margin? What gives confidence for a 33.0 next quarter? Better commodities environment expected.
- Question on better than guidance results and margin -> Better results caused by better than expected commodities environment, weaken dollar. Margin was down because last quarter Apple had OS X sales (which were high margin sales)
- Question on iPhone sales/shortages -> reason of U.S. stock outs is unlocking (the number continues to be significant)
- Direct/Indirect sales: 53% direct (up from 49%), expanding stores through December
- Question on iPhone revenue recognition delays: It's because of the announced 2.0 features, will be recognized when the free software update is delivered.
- Timing on iPhone products? No comment on unreleased products, expansion to more countries in Europe and Asia during the year.
- Economic context and Apple question: Good results because of outstanding innovative products, 12 million more people in our stores this year, growth is accelerating overlay.
- GS question, date of release of 2.0 software: coming in late June, 33% expected growth margin includes delay in iPhone revenue recognition.
- Why guidance is lower? It's a 33% increase since last year. Reasons why its lower are Mac channel inventory has increased 60K, iPhone revenue recognition delay, sequential decrease in iPod sales, international price reductions took in february (iPod shuffle).
- International Stores question: 45 new stores expected to open this year internationally
- Customer segments question: Amazing December and March quarters for consumers, good store traffic (44 million) in the U.S.
- iPhone revenue recognition delay question: the 1.7 million unit sales number is the real one, but Apple doesn't post the revenue yet.
- Another iPhone accounting question: Both revenue and product cost are delayed. The 2.0 update is free for current customers. Customers who purchased the phone after March 6 are aware of the new features, properly accounting requires Apple to do that revenue recognition delay.
- 2.5G iPhone to remain when 3G released? No comment.
- Mac sales question: the only unusual thing on Mac sales is that the MacBook Air was introduced in January and available later in the country, the MacBook Air was near a supply/demand balance in March. No comment on units sold for the Air "The customers love it".
- American Technology question on the Acquisition of P.A. Semi: "we occasionally buy smaller companies from time to time and we don't have the habit of commenting on that..."
- Changes in behavior on iPhone unlocking activities: hard to estimate, it's significant, shows a clear interest globally, coming in more countries, 10 million target in 2008
- Question on price subsidizing in Europe: currently inventories are low in Apple's and mobile carriers channels (US & Europe). "We sold more than we though we would and now inventories are low" in total but not in Europe?
- Needham question on demographics of MacBook Air's purchases and how many Windows users purchased it: college professors, students, people who travel a lot.
Conf call ends, webcast here.