Apple Earnings Preview: iPhone, iPad Sales to Trigger Record Profit

Apple, which reported its first $100 billion year for the period ended in September, is expected to report its most profitable-ever first quarter Tuesday. Consumers rushed to the company's 361 stores, as well as wireless carriers, for the new iPhone 4S.

Then there were millions of iPad2s, iPods and MacAir products shipped as holiday gifts, as well as millions of iTunes downloaded from the Cupertino, Calif.-based technology, telecommunications and entertainment company.

Analysts expect Apple to report earnings of $9.95 a share, up 54 percent, on revenue expected to surge more than 40 percent to $38.58 billion.

Obviously, the company will report exactly how many new iPhone 4S models it sold, as well as older iPhones, plus all other products, including iPad2s. Peter Misek of Jefferies estimates Apple sold as many as 35 million iPhones, 14 million iPad2s and even boosted sales of Macs and MacBook Air products in a quarter when sales of PCs barely budged.

A sticking point for the tech giant is its cash pile, $85.1 billion last quarter. Apple is under pressure to tap it for acquisitions, or perhaps a special dividend to shareholders, much as Microsoft did in 2004.

Now that CEO Tim Cook is running Apple without Chairman Steve Jobs, he's free to implement his own policies. For the first time, Apple has been selling old and new products in the iPhone line simultaneously, something Jobs wouldn't permit. There may be some other changes.

Cook, 51, and CFO Peter Oppenheimer, 48, also may announce eagerly anticipated shipping dates for the iPad3, Apple TV and other coming prodcuts. The two Apple veterans may shed more light on coming attractions than Jobs used to do.

Many analysts expect the iPad3 to ship by early March and Apple TV or iTV to turn live as early as July. Last week, the company launched a digital textbook initiative with major publishers including Pearson and McGraw Hill that would use iPads as in-school textbooks. Revenue expectations for iBooks 2 weren't specified.

Apple's market capitalization is about $398 billion, making it the world's most valuable technology company and only slightly below ExxonMobil's $420 billion. Last week, Apple shares set an all-time high of $431.3. In late trading Monday, they were at $426.37, up $6.07.