Apple tops Wall Street forecasts with hot iPhone sales

Apple beat Wall Street earnings expectations on Tuesday with help from strong sales of iPhones, boosting a share price weighed down by concerns the company was losing its game-changing cutting edge. Quarterly profit of $6.9 billion was down 22 percent from a year ago but translated to $7.47 per share, well ahead of analysts\' forecasts. The California tech giant reported revenues of $35.3 billion in the quarter ending June 30, powered by sales of 31.2 million iPhones, a record for the June quarter. The quarterly data showed iPad sales disappointing however at 14.6 million compared with 17 million in the same period a year ago. Apple shares jumped more than three percent in after-hours trade to $434.60, lifting a stock which has tumbled from last year\'s high above $700. \"I feel really good about where we are,\" Apple chief Tim Cook said during an earnings call with analysts. \"We we have more than one tool in the tool box. We are working on some things we are really proud of and we will announce things when we are ready.\" Apple is poised to release new versions of its operating systems for mobile devices and Macintosh computers and is \"laser-focused and working hard on some amazing new products that we will introduce in the fall and across 2014,\" Cook said. Rumors of new Apple unveilings include an \"iWatch\" wrist computer; an improved Apple TV, and lower-priced version of iPhone for developing markets such as China. Apple is expected to roll out smartphones and tablets in the coming months with bigger screens in a move analysts say is an attempt to catch up with a trend set by its major rival Samsung. Recent unconfirmed reports indicated that Apple and its Asian suppliers are testing smartphone screens larger than four inches and tablet screens slightly less than 13 inches. By offering multiple screen size options and prices on Android-powered smartphones or tablets, Samsung has seen its market share rise. While Apple is still praised for its trend-setting devices, it has been losing market share in smartphones and tablets, mainly to companies using the Google Android operating system. A recent IDC survey showed Android holding a 75 percent market share for smartphones in the first quarter, to 17.3 percent for Apple\'s iOS platform. Apple still holds a majority in the tablet market but many analysts say Android will overtake the iPad sometime this year. Apple generated $7.8 billion in cash flow from operations in the recent quarter and paid stockholders $18.8 billion through dividends and repurchasing shares, according to Apple chief financial officer Peter Oppenheimer. Apple forecast that revenue in the current quarter would total between $34 billion and $37 billion and that its gross margin would be about 36 or 37 percent. Brian White at Topeka Capital Markets said Apple\'s results were mixed, but that the company is poised to come out with new products soon which will fuel growth. \"We believe fiscal 2013 will prove to be a year to forget but fiscal 2014 will prove to be a year of new product innovations, which we believe will prove positive for the stock price,\" he said in a note. \"We believe Apple will trade higher into this new product cycle in fiscal 2014.\" During an earnings call with analysts, Cook said that key catalysts for growth at Apple remain new products and services, including innovations targeting new categories. Cook was adamant that there is tremendous opportunity for Apple in China despite the lackluster showing there in the quarter, and said he doesn\'t \"get discouraged over a 90-day kind of cycle that can have economic factors and other things in it.\" It is wiser to look at Apple in the context of how it is positioned for the long term, according to Forrester analyst Frank Gillett. \"Apple, as a company that makes great products that integrate hardware and software well along with adding on services, is positioned quite well,\" Gillett said. \"I don\'t see anything in this earnings announcement that indicates a crisis,\" he continued. \"I see Apple continuing to sell huge amounts of products.\"