Apple posts record $8.2 billion in profits on millions of iOS device sales, but falls short of estimates
Stop me if you’ve heard any of this before: a tech giant failed to meet Wall Street expectations for the third quarter of the year, while bringing in huge profits nonetheless.
We all saw Google’s leaked Q3 2012 results that sent the stock into a downward spiral until trading was stopped. Microsoft’s own numbers fell short of what analysts expected. Now it’s time for Apple to take the same path with its results for Q4 FY2012 (the period ending on September 30 represents the company’s fourth fiscal quarter).
So how did Apple do? Better than Google and Microsoft combined, reporting $8.2 billion in net profits or $8.67 per share (EPS) on $36 billion of revenue. The company is on an ascending path, when looking at the year ago quarter, when it posted $6.6 billion in profits ($7.05 EPS) on $28.3 billion, but it still fell marginally short of analysts expectations: $8.81 EPS on $35.8 billion of revenue. Apple stock dropped over 1% on the news.
Overall, Apple shipped 26.9 million iPhones – a number higher compared to Q4 FY2011 and most likely boosted by strong iPhone 5 sales in the last days of its Q4 – and 14 million iPads, a number that’s seen as “well below lowered forecasts for the tablet,” despite being higher during the same period last year.
Forecast for the crucial December quarter is at $52 billion in revenue – “below the average estimate of $55 billion, according to Thomson Reuters I/B/E/S,” but we’ll note that Apple sits on a $121.3 billion pile of cash, and that in just three quarters it has already passed its entire 2011 performance when it comes to revenue and profits.
Why is any of this important for the Android ecosystem and the mobile market? Well a company with that much money on hand, that sells at least two mobile products that are still in hot demand with consumers and that is able to report higher earning year-over-year quarters is still a fierce rival for anyone else in the mobile business, especially Google and Microsoft, who are yet to reap similar profits from their mobile divisions.
The Christmas quarter will definitely be interesting to watch, with a variety of new mobile devices already available, or about to hit stores from all major players.
What smartphone and/or tablet are you buying this holiday season?
Apple Reports Fourth Quarter Results
26.9 Million iPhones Sold; Record Fourth Quarter Revenue and Profit
Board Declares Quarterly Dividend of $2.65 per Common Share
CUPERTINO, California—October 25, 2012—Apple® today announced financial results for its fiscal 2012 fourth quarter ended September 29, 2012. The Company posted quarterly revenue of $36.0 billion and quarterly net profit of $8.2 billion, or $8.67 per diluted share. These results compare to revenue of $28.3 billion and net profit of $6.6 billion, or $7.05 per diluted share, in the year-ago quarter. Gross margin was 40.0 percent compared to 40.3 percent in the year-ago quarter. International sales accounted for 60 percent of the quarter’s revenue.
The Company sold 26.9 million iPhones in the quarter, representing 58 percent unit growth over the year-ago quarter. Apple sold 14.0 million iPads during the quarter, a 26 percent unit increase over the year-ago quarter. The Company sold 4.9 million Macs during the quarter, a 1 percent unit increase over the year-ago quarter. Apple sold 5.3 million iPods, a 19 percent unit decline from the year-ago quarter.
Apple’s Board of Directors has declared a cash dividend of $2.65 per share of the Company’s common stock. The dividend is payable on November 15, 2012, to shareholders of record as of the close of business on November 12, 2012.
“We’re very proud to end a fantastic fiscal year with record September quarter results,” said Tim Cook, Apple’s CEO. “We’re entering this holiday season with the best iPhone, iPad, Mac and iPod products ever, and we remain very confident in our new product pipeline.”
“We’re pleased to have generated over $41 billion in net income and over $50 billion in operating cash flow in fiscal 2012,” said Peter Oppenheimer, Apple’s CFO. “Looking ahead to the first fiscal quarter of 2013, we expect revenue of about $52 billion and diluted earnings per share of about $11.75.”
Apple will provide live streaming of its Q4 2012 financial results conference call beginning at 2:00 p.m. PDT on October 25, 2012 at www.apple.com/quicktime/qtv/earningsq412. This webcast will also be available for replay for approximately two weeks thereafter.
This press release contains forward-looking statements including without limitation those about the Company’s estimated revenue and diluted earnings per share. These statements involve risks and uncertainties, and actual results may differ. Risks and uncertainties include without limitation the effect of competitive and economic factors, and the Company’s reaction to those factors, on consumer and business buying decisions with respect to the Company’s products; continued competitive pressures in the marketplace; the ability of the Company to deliver to the marketplace and stimulate customer demand for new programs, products, and technological innovations on a timely basis; the effect that product introductions and transitions, changes in product pricing or mix, and/or increases in component costs could have on the Company’s gross margin; the inventory risk associated with the Company’s need to order or commit to order product components in advance of customer orders; the continued availability on acceptable terms, or at all, of certain components and services essential to the Company’s business currently obtained by the Company from sole or limited sources; the effect that the Company’s dependency on manufacturing and logistics services provided by third parties may have on the quality, quantity or cost of products manufactured or services rendered; risks associated with the Company’s international operations; the Company’s reliance on third-party intellectual property and digital content; the potential impact of a finding that the Company has infringed on the intellectual property rights of others; the Company’s dependency on the performance of distributors, carriers and other resellers of the Company’s products; the effect that product and service quality problems could have on the Company’s sales and operating profits; the continued service and availability of key executives and employees; war, terrorism, public health issues, natural disasters, and other circumstances that could disrupt supply, delivery, or demand of products; and unfavorable results of other legal proceedings. More information on potential factors that could affect the Company’s financial results is included from time to time in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s public reports filed with the SEC, including the Company’s Form 10-K for the fiscal year ended September 24, 2011, its Forms 10-Q for the fiscal quarters ended December 31, 2011; March 31, 2012; and June 30, 2012; and its Form 10-K for the year ended September 29, 2012 to be filed with the SEC. The Company assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates.
Apple designs Macs, the best personal computers in the world, along with OS X, iLife, iWork and professional software. Apple leads the digital music revolution with its iPods and iTunes online store. Apple has reinvented the mobile phone with its revolutionary iPhone and App Store, and is defining the future of mobile media and computing devices with iPad.