Apple Quarterly Profit More Than Doubles on IPhone Demand

Apple reported quarterly profit that more than doubled as holiday purchases of the iPhone catapulted sales to a record and helped the company steer clear of the consumer-spending slump that has hurt rival companies.

Fiscal first-quarter profit surged to $13.1 billion, or $13.87 a share, Apple said today in a statement. Sales rose 73% to $46.3 billion. Analysts surveyed by Bloomberg on average estimated profit of $10.14 a share on sales of $39 billion. Per-share profit for the quarter was more than the company earned in any fiscal year before 2010.

Apple sold 37 million iPhones, up from the previous record of 20.34 million. Customers snapped up the 4S model that went on sale in October, a week after the death of co-founder Steve Jobs. The results mark the first time the company's quarterly revenue topped Hewlett-Packard Co.'s, underscoring how its focus on sleek touch-screen mobile devices has reshuffled leadership in the industry.

"Those numbers are just unimaginable," said Michael Obuchowski, chief investment officer at First Empire Asset Management, which has $4 billion under management, including Apple shares. "It's still an extremely well-managed company, and they are showing that the product pipeline is sufficient even now to generate growth rates that are unrivaled."

Cupertino, Calif.-based Apple , in looking ahead to results for the second quarter, forecast revenue of about $32.5 billion and profit of $8.50 a share. That compares with average analysts' predictions for sales of $31.9 billion and profit of $7.96 a share.

In the first quarter, which ended Dec. 31, the company exceeded the highest analysts' estimates for sales and profit, and topped the most optimistic forecasts for iPhone and iPad shipments. A year earlier, the company had profit of $6 billion, or $6.43 a share.

Apple sold 15.4 million iPads, topping the 13.5 million projected by analysts. IPhone sales on average were predicted to reach 30.2 million.

"Apple 's momentum is incredibly strong, and we have some amazing new products in the pipeline," Apple CEO Tim Cook said in the statement. The period was the first full quarter since Mr. Cook took over as CEO in August, when Mr. Jobs stepped down, six weeks before his death.

The results contrast with those of companies such as Microsoft Corp. and Intel Corp., which are grappling with slower personal-computer sales in part because customers are choosing to buy smartphones and tablets like the iPad instead. They are trying to catch up by rolling out new mobile products, including Microsoft's Windows 8 operating system, designed to integrate more smoothly with smartphones and tablets.

Rival smartphone makers also have struggled to keep pace with Apple . HTC Corp. and Motorola, two of the biggest companies whose devices run Google's Android operating system, disappointed investors with results for their most recent quarters. Research In Motion, which has lost 90% of its market value since 2008, replaced its co-CEOs this week.

Apple collects more than half the profits in the mobile-phone market, according to Horace Dediu, a former Nokia analyst who now operates the Asymco industry-research website.

"Everybody else is losing market share if they compete against Apple ," said Brian Marshall, an analyst at ISI Group in San Francisco. "They are dancing to their own tune."

Holiday iPhone demand helped Apple gain market share on manufacturers including Samsung Electronics Co.and HTC. In December, about 45% of U.S. shoppers who bought a smartphone in the previous three months said they purchased an iPhone, up from 25% in a study done two months earlier, according to Nielsen Co. Android phones were selected by 47% of buyers, down from 62%.

Competitors also haven't been able to match the success of the iPad, with Apple controlling 62% of the tablet market in the third quarter, according to researcher IDC.

The popularity of the iPad and iPhone has also buoyed sales of Apple 's lineup of Mac computers. The company sold 5.2 million Macs in the first quarter, up from 4.9 million in the previous quarter.

Hewlett-Packard had revenue of $32.1 billion in its most recent quarter, which ended in October. The Palo Alto, California-based computer maker will report fiscal first-quarter results next month.