After spending recent months fighting off questions about the health of chief executive Steve Jobs, iPod maker Apple today shrugged off its critics by announcing some of the best financial results in its history.
Despite the economic gloom, the Californian technology giant reported revenues for the three months to the end of June of $8.34bn – up almost 12% from the same time last year. That generated profits of $1.23bn, a 15% increase on this time in 2008, and a record amount for the company outside of the Christmas season.
The success was achieved largely thanks to the launch of the new iPhone 3GS, which went on sale in June – as well as renewed interest in the company’s Macintosh computers. Sales of iPods were down year-on-year, although the company hinted that more models were on the way later this year.
“We’re proud to report the best June quarter for both revenue and earnings in Apple’s history,” Jobs, who returned to work a few weeks ago after undergoing life-saving liver transplant surgery, said in a statement.
“We set a new record for Mac sales, we think we have a real winner with our new iPhone, and we’re busy finishing several more wonderful new products to launch in the coming months.”
During a six-month leave of absence, the company was run by chief operating officer Tim Cook, whose successful command underscores the view of many that he is set to be Jobs’s successor.
But Apple’s fortunes contrasted sharply with those of Yahoo, which reported another disappointing quarter.
Revenues for the past three months dwindled to $1.573bn, down 13% year on year, while profits dropped to $76m – a 25% fall from the same period in 2008.
The company said it had been hit heavily by currency fluctuations, which accounted for nearly 5% of the fall in revenue, but insisted that the figures represented a “solid quarter” in the face of wider economic turmoil.
“I’m pleased with our results this past quarter,” said chief executive Carol Bartz. “We established a clear, simple vision to be the centre of people’s lives online, and we’re backing that vision with important initiatives to create ‘wow’ experiences for our users.”
The company was keen to point to the recent relaunch of its homepage, one of the web’s most popular portals – but those words seem foolhardy just days after Yahoo’s main rival posted results that bucked the downturn entirely. Although Google’s overall revenues were flat for the last quarter, the company eked out efficiencies to post an 18% increase in profit year on year.
That will not have gone unnoticed at Yahoo, where the company’s inexorable slide has been taking place for several years – ending the rule of a succession of executives who were unable to prevent the rot from taking hold as Yahoo. Most recently co-founder Jerry Yang stepped aside as CEO in January to be replaced by tough-talking technology veteran Bartz. However, despite attempting to streamline and reorganise the company, she has yet to make a noticeable impact on the bottom line.
The numbers will also make intriguing reading for executives at Microsoft, after reports last week that the Seattle technology giant was close to signing a deal with its Silicon Valley rival.
The two companies have had a testy relationship ever since Microsoft launched a $45bn takeover bid for Yahoo last year – but even so, they are believed to be closing in on a deal that could see Microsoft take control of Yahoo’s search engine for around $3bn.
Microsoft is desperate to take on Google and gain more traction in the lucrative search advertising market – but Martin McNulty, director of search marketing specialist Trafficbroker, said that the raised more questions than it answered.
“The results are really just a sideshow to the main event right now, and that’s the potential deal with Microsoft,” he said. “It’s unclear why Yahoo can’t stand on its own two feet, as it still commands a significant market share in search queries and advertising revenues globally.”
“Even if the deal does go ahead,” he added, “A Microsoft-Yahoo collaboration is unlikely to offer an increased threat to Google, which, brand and technology-wise, is in a league of its own.”