Apple released its quarterly financial results on Tuesday and sold $35 billion worth of cool Apple gear, putting the company well on track for well over a $100 billion year.
I remember the days well when Apple was striving to hit $5 billion in sales, so it is a bit surreal to see Apple’s stock price plummet by 5% after they posted record sales and profits for the 3rd quarter. But then again, if the analysts on Wall Street were so smart, maybe we would not have the serious economic troubles we are experiencing now.
As the say on NPR’s Marketplace, “let’s do the numbers.”
*Totals*
Apple sales were $35 billion for the quarter, compared to $26.8 billion for the same period last year. That yielded a quarterly profit of $8.8 billion, a 20% improvement over last year’s same quarter profit of $7.3 billion. Not too shabby!
As promised, Apple’s Board of Directors declared a $2.65 per share dividend which will share some of that profit with shareholders.
*iPads*
Apple sold more iPads in this quarter than in any other quarter, ever. That is saying something because the holiday quarters were huge for iPad sales. iPad sales grew by 84% to 17 million iPads for the quarter accounting for over $9 billion in revenue.
*iPhones*
Apple’s iPhone sales increased year-over-year by 28% with over 26 million iPhones sold and $16.2 billion in sales.
*Macs*
While the rest of the PC market is in sharp decline and even with the iPad cannibalizing computer sales, Apple sold 4 million Macs, representing a 2% growth in that sector. The late announcement of the newly revised Macs in June probably had some impact on those numbers, but the reality is that there are many consumers and businesses finding that an iPad can do much of what a PC could do, and at a lower cost.
*iPods*
The iPod market continues to decline with 6.8 million iPods sold, with the iPod touch accounting for half of that. While this was a year-over-year decline, it was ahead of Apple’s expectations. Apple continues to dominate the MP3 market with over a 70% market-share. The decline is really due to all of the other ways that people can access their music now, with iPads and iPhones leading that trend. There are now 20 million songs on the iTunes store!
*Apple Retail *
I don’t like reporting on Apple retail as they are our direct competitors (our best friends and worst enemies), but the Apple retail stores added $4.1 billion in revenue and they now have 372 stores with 123 outside of the US.
*Cash*
Apple has $117.2 billion in its cash hoard with nearly 70% of that outside of the US.
*Guidance*
Apple expects revenue of $34 billion in the next quarter and earnings per share of about $7.65. This also disappointed analysts but they are incredibly healthy numbers and significantly above last year’s 4th quarter sales of $28.3 billion. When questioned about this, Apple said that some of these numbers are driven by “fall transition,” a strong US dollar and a full quarter of back-to-school discounting. Of course, we know to expect a lot of changes to the Apple product line-up in the fall as they get ready for the holiday quarter.
I am not going to give stock advice, but there are points in time that Apple stock is worth buying as it gets artificially hammered by Wall Street. This very well might be one of those times, with Apple selling for less than 11 times their projected 2013 earnings. But don’t listen to me; I am completely and totally biased and an Apple fanboy!
It is always a tricky business to predict the sales and profit results of any business. I know this because Hapy and I have been trying to predict our results for a few decades. Hapy is really good at this stuff, but if a bunch of onlookers judged us on how close we came to our numbers, we’d be hurting units.
I am always thrilled when we beat our projections by even $1, so when Apple beats their own projections but falls short of outsider’s WAGs, it just baffles me to see the naysayers come out. There is not a better managed, more innovative and successful company than Apple right now and Tim Cook and his team deserve a lot of credit for this next chapter of the greatest story in American business.
Now, Tim, just what is in that “fall transition”?
