The Most Profit Ever in a Single Quarter

ByDon

Apple posted record earnings and profit for the holiday quarter disappointing those analysts that predicted less than stellar results. Of course, the realistic guidance for the next quarter sent Apple stock plummeting while those same analysts maintain a price target that is $40-50 higher than the current price of the stock. Okay, so Apple’s profit and revenue were all time records for the company but the remarkable tidbit is that no public corporation ever has posted that much profit in a single quarter. Let’s see how Apple did that.

First of all, Apple sold 74.8 million iPhones in the quarter. Not too shabby and that revenue is nearly 70% of Apple’s total. The average sales price (ASP) for the iPhone was up to $691 which also led to slightly higher gross margin. To put that is some perspective that is an average of 34,000 iPhones sold per hour 24/7 for 13 weeks.

They finished the quarter with about $215 billion in cash which represents about $39/share. Macs sales were down a bit at 5.3 million units and the iPad continues to do moderate in sales with sales dropping year on year from 21.4 million units to 16.1 million units.

Currency “headwinds” have caused some of these results to be muted. With the exceptionally strong dollar it is more difficult to export US goods and sales suffer a bit. The Euro and British Pound were down double digits and the Canadian and Australian dollars were down 20% or more. It gets worse. The Russian Ruble is down by 50% and Brazilian Real is down 40%. Apple estimated that if it were not for these global currency fluctuations that their revenue would have been over $80 billion representing an 8% increase. But despite those headwinds, Apple posted their best quarter ever.

Other high points were service revenue which was the highest ever at over $6 billion. Wow, $6 billion in just iTunes, App store and a few other things. That is more revenue that quite a few well known companies and a 24% growth year over year. Other products which include the Apple TV, Beats and Apple Watch also were strong with $4.5 Billion in sales.

In another milestone that just points to the success of the services side of Apple’s business Tim Cook announced that they now calculate that there are more than 1 billion Apple devices in use worldwide which is up 25% year over year. That is simply incredible considering that there are only 7.4 billion people on the planet!

What sent Apple stock down was Apple’s realistic prediction that iPhones sales in their 2nd fiscal quarter would decline year over year by as much as 15-20%. Last year’s 2nd quarter was strong because of supply issues that moved some revenue from the 1st to 2nd quarter and the impact of the global currency situation has caused some price adjustments. Apple remains very bullish on the iPhone market and pointed to the fact that in China over 50% of the iPhones sold were to people buying their first iPhone. Apple pointed out that the growth of the middle class in China is unprecedented with the middle class comprising about 50 million people in 2010 and now it is projected to be $500,000,000 by 2020.

Even if Apple sells “only” the 40-45 million iPhones in this quarter that would still be more revenue that most companies earn overall in a single quarter. To put this in perspective, Apple books more revenue at strong margins, than Amazon, Facebook, Google or Microsoft generate from all of their operations.

All in all the financial results that Apple announced were an incredible testament to the quality and innovation of Apple products and of a company doing things right. Congratulations to the entire Apple team!

Similar Posts

  • _Dear Friends,_

    Vermont is back in the freezer as April becomes the most frustrating month for the Green Mountains. The days are longer, there is sun but it is too early to work in the garden. The roads are muddy and while the black flies haven’t awoken yet, it is hard to stay in the house but challenging to go outside.

    The iPad Pro 9.7-inch model has arrived at our stores and the initial sales have been strong. While this new iPad, at first glance, looks like the old iPad, once people start using it, playing with the Apple Pencil and realizing the advancements of this latest iPad they are hooked. Size-wise, I think that it might be ideal. The iPad Pro 12-inch model is, well it is big. The iPad mini is good for reading or checking your email abut the 9.7-inch iPad Pro is just right.

    I am very pleased to introduce the latest member of the Small Dog Team, Amy Farnsworth, who joins us as our Marketing and Design manager. Amy has strong marketing and graphic design background from her work in Utah and has recently relocated to Vermont with her husband. She says “I am a graphic designer, daydreamer, dog lover, wife, sister, best friend, Netflix junky & secret dad joke lover.” I think she will fit in fine! Please join me in welcoming Amy!

    This week’s Kibbles & Bytes exclusive features the Apple Certified Refurbished MacBook Pro. This is not a stripped down MacBook Pro but a fully-configured unit ready for your toughest challenges. It features the 2.8 GHz i7 intel processor, 16GB of ram, a 1TB hard drive and the NVIDIA 750M graphics chip driving the awesome “15-inch Retina display.”:http://www.smalldog.com/wag900002189 This Macbook Pro comes with the same 1-year warranty as new Macbook Pros but we are bundling it this week with Applecare that not only extends that 1-year warranty to 3-years but also extends your 90-days of free tech support from Apple to 3-years as well. “Kibbles & Bytes readers save $100 on this bundle at only $2925.98!”:http://www.smalldog.com/wag900002189

  • Your Kibbles & Bytes Team,

    _Don, Emily & Dean_

  • Backups: Trust but Verify

    It’s easy to assume your backup app—whether it’s Time Machine, Carbon Copy Cloner, Backblaze, Retrospect, or something else—is quietly doing its job. But…