Apple Gets Love from Asia-Pacific: Earnings Soar 78%
Apple (AAPL) crushed analysts' first-quarter earnings predictions Tuesday as its Asia-Pacific sales nearly tripled. The news may help reassure investors that Apple has a strong platform for growth, with or without Steve Jobs running the show. Shares had plunged Monday after Jobs announced his third medical leave of absence since 2004, but on Tuesday, investors -- apparently pleased with the earnings results -- pushed Apple into the black during after-hours trading.
Apple shares rose 0.21% to $341.36 after the markets closed, but climbed a total of 1.59% higher -- to $345.49 a share -- following the company's earnings conference call with analysts. Apple smartly timed the news of Jobs' medical leave to coincide with its earnings announcement, helping to cushion the stock.
Apple investors should keep keen eye on the Asia-Pacific region, which accounted for nearly $5 billion in revenues for the quarter, or nearly one-fifth of Apple's total $26.7 billion in sales. Greater China, in particular, played a large role: It accounted for roughly half of those revenues.
And its influence is likely to grow larger in the near future. "Several years ago, we identified China as our top priority," Tim Cook, Apple's chief operating officer, said during the conference call. "We put enormous energy into China and the results of that have been absolutely staggering."
China Sales Quadruple
For example, revenues from greater China -- Mainland China, Hong Kong and Taiwan -- quadrupled, year over year, to $2.6 billion in the first quarter, he said. With those results, Apple plans to devote even more resources to expanding in the Asia-Pacific region, he added.
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One area of expansion may include adding other wireless carriers to its greater China market. With the demise of AT&T's (T) exclusive contract to carry the iPhone in the U.S., Apple no longer has any exclusive carrier contracts in operation anywhere in the world, Cook noted.
"Where we have gone from an exclusive carrier arrangement to a dual or multicarrier arrangement, our growth has changed significantly and our market share has increased," Cook said."That doesn't mean this will happen in every country, nor does it mean that we're just out doing this in every country. We look at each one individually, because each market has its individual characteristics, its own parameters and its own technology."
Apple declined to say whether it plans to expand beyond China Unicom in order to take on additional carriers in China. Cook did say that other carriers are interested in carrying the iPhone, but wouldn't specify which countries -- or carriers -- have expressed interest.
But it's clear that the company sees China as a massive opportunity for further growth. In China, Cook said: "It's clear we're introducing a lot of people to Apple that had previously had not been introduced to the company and I think that helps across the product line."
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