Apple Misses On Earnings, Hits On Revenue, iPhone Crushes It, And iPad Is Weak

Tim CookApple CEO Tim Cook

Photo: AP

Apple reported a mixed bag of earnings tonight.Revenue is right in line, but EPS is worse than expected.

Apple beat on iPhone sales, but was below expectations for the iPad, Macs, and iPods.

Shares were halted before the earnings hit. Once they were open for trading, they started off down 2.5%. Not that bad, really.

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Here is what Apple reported versus expectations here. (Expectations via Gene Munster at Piper Jaffray.):

  • Revenue: $36 billion versus $36 billion expected.
  • EPS: $8.67 versus $8.81 expected.
  • iPhone: 26.9 million versus 25.3 million expected.
  • iPad: 14 million versus 15 million expected (See below for explanation on this estimate).
  • Mac: 4.9 million versus 5 million expected.
  • iPod: 5.3 million versus 5.5 million expected.
  • Gross Margin: 40% versus 40.5%
  • December quarter revenue: $52 billion versus $54.9 billion expected.
  • December quarter EPS: $11.75 versus $15.45 expected.
  • December gross margin: 36% versus 43% expected.
  • Cash, short term, and long term securities: $121.3 billion.

The first thing that jumps out at us in this release is the weak iPad number. Analysts were really expecting Apple to sell 17.5 million iPads for the quarter. But, because Apple announced 100 million iPads sold at its iPad mini event, analysts rejiggered their numbers and backed into 15 million sold. Apple still missed that number. So, if you compare iPad sales to the original estimate, it’s truly awful. We’re guessing Apple will blame rumours about the iPad mini for weak iPad sales.

The next thing that jumps out is the iPhone sales. They were much better than expected. We’ll be interested in hearing more on the call about why iPhone sales were so good.

We’re live blogging the call, which starts at 5 PM eastern.

Click here for the latest.

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