Apple Destroys Q3 Earnings Estimates With Record Revenues, Profit, iPhone, And iPad Sales

Following Google’s stellar earnings last week, Apple has today announced their own earnings for their Q3 period. As expected, they’re good. Massively good.

Apple set several new records last quarter in terms of both revenues and sales. Most notably, Apple’s revenue was a staggering $28.57 billion — over $5 billion ahead of their (always low) guidance, and nearly $3 billion ahead of the $24.92 billion that Wall Street had been expecting. What’s perhaps most crazy about those numbers is that they’re a new record for the company, and it comes in a non-holiday quarter (typically the best for consumer electronics companies). Apple’s last holiday quarter earnings, Q1 2011, saw revenues of $26.7 billion.

As for some other key numbers, Apple saw net quarterly profit come in at $7.31 billion — also a new record, by a long shot (last holiday quarter was $6 billion). Earnings per share were $7.79, far, far ahead of the $5.03 EPS guidance, and way ahead of the $5.80 Wall Street had been looking for.

Apple sold 20.24 million iPhones in the quarter, a new record. The Street had been hoping to see sales around 16.5 million. The iPad numbers were just as bright, with 9.25 million units being sold. Wall Street had been looking for 7.8 million there. One slight dim spot were Mac sales, which came in at 3.95 million, blow the roughly 4.2 million Wall Street was hoping for.

Netflix earnings Way up despite Growing Competition

Netflix revealed this week that its earnings are up 88% compared to this time last year. The subscription movie service reported a net income of $60 million on its Q1 report.

More than 3 million new subscribers have signed on to Netflix since January, pushing its total number of viewers to 23.6 million — more than those buying Comcast cable alone. (Comcast still has many more subscribers than Netflix does if you count the customers who buy video service alongside voice and Internet.)

Netflix’s earnings have benefited from a price increase on its hybrid service that took effect with its pure streaming plan in November. While the changes were made in Q4 of 2010, they took effect in Q1. Meanwhile, Netflix set a new company record for marketing spend.

Netflix is reaping the benefits of establishing a post-Blockbuster model of video rentals. Several competitors have launched to challenge it in the last 12 months — Hulu Plus and Amazon’s Prime Instant Video. Dish Networks, which purchased Blockbuster in April, will likely launch a subscription streaming effort under that brand.

The competition helps explain why Netfix has a new focus on original content. It has made exclusive partnerships with CBS and Lionsgate, as well as a non-exclusive agreement with Fox in Q1.

“Our competitive strategy relative to other streaming services is simply to grow as fast as we can, so we can afford more content, more marketing, and more R&D than our competitors,” explains Netflix’s Q1 letter to its shareholders.

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