Apple's 'Mind-Boggling' Quarter

Updated from 5:09 p.m. EST to provide comments from the conference call and updated share price.

CUPERTINO, Calif. ( TheStreet) -- Apple ( AAPL) blew away Wall Street estimates, and revenue moved well past the $40 billion mark in its latest quarter, as sales of the iPhone, iPad, and Macs were extremely strong for the holiday period.

Apple reported earnings of $13.06 billion, or $13.87 a share, on revenue of $46.33 billion for its fiscal first quarter ended Dec. 31. Analysts polled by Thomson Reuters expected a profit of $10.15 per share on just over $39 billion in revenue in the period.

"We're thrilled with our outstanding results and record-breaking sales of iPhones, iPads and Macs," said Tim Cook, Apple's CEO, in the press release. "Apple's momentum is incredibly strong, and we have some amazing new products in the pipeline."

International sales accounted for 58% of the company's quarterly revenue. The demand in China "has been staggering," Cook said. China is Apple's fastest growing market.

The Cupertino-based company sold 37.04 million iPhones, 15.43 million iPads, 5.2 million Macs, and 15.4 million iPods during the holiday quarter. Gross margins during the quarter were 44.7%, compared to 38.5% a year ago.

Cook did not make any mention of the oft-rumored Apple TV when asked, but did refer to the Apple TV device still as a "hobby," and the company "will continue to pull strings and see where it takes us."

The iPhone is changing the way we work, with nearly all Fortune 500 companies supporting iPhones on their network, CFO Peter Oppenheimer said on the conference call. The iPhone 4S available in 90 countries, and it is Apple's fastest roll out ever.

A reader poll prior to the report found 73.8% of Apple watchers expected 30 million iPhones or more to be sold during the quarter.

Bill Kreher, techonolgy analyst for Edward Jones had a hard time finding the words to describe how strong a quarter this.

"It's hard to come up with a superlative to discuss the results. Guidance was even better than what was expected." With regards to the 37.04 million iPhones sold during the quarter, Kreher called the number "absolutely mind boggling." Apple is on Edward Jones' Stock-focus list with a buy rating.

Apple's Cook described the reaction to the iPhone 4S as a "breathtaking customer reception" with regard to unit sales. There were supply constrains during the quarter, and Cook indicated the company could have sold more iPhones had it not been for the supply issues. Apple has worked to alleviate some of these issues during the March quarter.

Apple also gave guidance for the second quarter that was above Wall Street expectations. It expects to earn $8.50 per share on $32.5 billion in revenue. The current average estimate of analysts polled by Thomson Reuters is for a profit of $8.04 a share in the March-ending period on revenue of $32.1 billion.

Apple generated over $17.5 billion in cash from operating during the quarter, approaching the $100 billion mark. Kreher thinks this is a "high-class problem," as investors may want to see cash returned eventually. "As long as Apple is producing results like this, that should keep calls for cash returned at bay," Kreher said.

Apple had $97.6 billion in cash and cash-like securities at the end of the quarter, $64 billion of which is overseas.

Despite calls for Apple to start paying a dividend or announce a buyback, the company did not announce anything. Oppenheimer said the company was "actively discussing the uses of its cash."

Shares of Apple are sharply higher in after-hours trading, up 7.9% to $453.50 on volume of 3.7 million, according to Nasdaq.com

The surge in the extended session is pushing Apple ahead of Exxon Mobil ( XOM) in the world's biggest company competition. The latest price translates to a market cap of $423 billion for Apple vs. $418 billion for Exxon.

Interested in more on Apple? See TheStreet Ratings' report card for this stock.

Check out our new tech blog, Tech Trends.

-- Written by Chris Ciaccia in New York

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