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Apple’s numbers are out and it is a monster blowout!Apple beat expectations across the board. We have all the important numbers below.
Shares are up 10% in after hours trading.
The biggest number that jumps out: 37 million iPhones sold. That easily beats the Street’s whisper number of 34 million iPhones.
The next number is 15.4 million iPads sold, which clobbers the 13 million expectation. Looks like the Kindle Fire didn’t have much impact.
Here’s what Apple did versus Wall Street expectations, via Piper Jaffray’s Gene Munster. (Whisper numbers in parenthesis.):
- Revenue: $46.33 Billion versus $38.76 billion expected
- EPS: $13.87 versus $10.07 expected
- iPhone units: 37.04 million versus 30.2 million expected (34 million whisper)
- iPad units: 15.4 million 13.2 million expected (13 million whisper)
- Mac units: 5.2 million versus 5 million expected (4.8 million whisper)
- iPod: 15.4 million versus 13.9 million expected, according to Bloomberg
- Gross Margin: 44.7% versus 41.8% expected
- March quarter revenue: $32.5 billion versus $31.9 billion expected
- March quarter EPS: $8.50 versus $8.00 expected
- Apple now has $97 billion in cash, short term, and long term securities
- The iPhone’s average selling price is up to $660
In the earnings release Tim Cook said, “We’re thrilled with our outstanding results and record-breaking sales of iPhones, iPads and Macs.” He added, “Apple’s momentum is incredibly strong, and we have some amazing new products in the pipeline.”
Some additional numbers to chew on:
- iPhone sales were up 128% year over year
- iPads up 111% year over year
- Cash flow from operations was $17.5 billion
- Apple’s profits are bigger than Google’s revenues
Notes from our live-blog of the earnings call:
5:03: CFO Peter Oppenheimer: Numerous new records. All time high iPhone, iPad, and Mac. Revenue $46.3 billion, y/y 73% growth. Driven by iPhone, iPad, Mac, and a 14th week. Net income $13.1 billion. Half of all revenue in Fiscal 2011!
5:04: Mac sales grew 26% compared to 0% forecast for market overall. Average weekly Mac sales up strong. AsiaPac up 58% y/y. MacBook pro and Air as well as strong iMac. 3 and 4 weeks of mac inventory at end of quarter.
5:05: Over 100 million Mac apps downloaded in less than a year. Sold 15.4 million iPods, ahead of expectations, iPod touch accounted for over half. iPod over 70% of MP3 market. Ended quarter in target with 6 weeks inventory on forward looking basis.
5:06: iTunes $1.7 billion revenue for quarter. Amazingly busy customers on Xmas day: over 140 mill of apps and content on December 25th
5:07: Strong iPhone growth in all segments thanks to iPhone 4S. People captivated by Siri. iPhone channel increased, had 6 million at end of quarter. $24 billion from iPhone and accessories, up 130%. Nearly all Fortune 500 companies approve and support the iPhone. Changing how companies use mobile devices. Many are developing mission critical iPhone apps.
5:08: Royal Dutch Shell, Credit Suisse, Facebook, Nike, just a few.
5:09 Thrilled to be shipping in China, it’s in over 90 countries. Fastest roll out ever.
Turning to iPad. Increase of 111%. Extremely popular with holiday shoppers. Revenue from iPad up 99% to $9.1 billion. Sell thru exceeding sell-in. iPad continues unprecedented adoption in Fortune 500 companies. Delighted to learn how businesses change their work thanks to iPad. (Talking about examples… Coldwell, Bed Bath and Beyond, people in vineyards, Chinese airline)
5:11: 1.5 million iPads in education institutions. Pleased to announce iBooks 2. With iBooks Author anyone with a Mac can make books and publish to iBookstore. Happy to announce iTunes U app last week, too.
5:12: 85 million iCloud users. 550,000 apps available. Developers earned over $4 billion, over $700 million in last Q alone.
5:13: $6.1 billion in revenue at Apple stores. iPhone sales robust thanks to iPhone 4S. iPad up significantly. Average revenue per store $17.1 million compared to $12 million last year. 110 million store visitors. Almost 22,000 visitors per store per week.
5:26: Cash is not burning a hole in our pockets. We’re still disciplined.
5:17: Going over guidance. GM to be 42%. Op Ex $3.05 billion.
5:18: Onto the Q&A!
5:19: Tim Cook talking about success of iPhone 4S. Customers “absolutely loving” it. Short of supply of iPhone thru quarter, ended with a significant backlog. Still short in key geographies. I think we made correct decision to go with a broad range of iPhones. The 14th week is a part of this, but everyone new that, and we did as well and factored into our guidance.
5:20: Strength in all regions, but U.S. and Japan stand out. iPhone in greater China, considering we didn’t launch in mainland at all last quarter. We could not be happier. Customers loving iPhone and we’re happy with that.
5:21: ASP up sequentially?
5:22: Tim Cook: iPhone 4S most popular. Typically see a higher mix at front of a launch.
5:22: Katy Huberty asking about pent-up demand …
5:23: Tim Cook: Demand in China is “off the charts”. We’re happy with demand response. Other countries were smaller countries. We’ll see how quarter goes from demand view.
5:24: Component environment is favourable and that allowed us to overachieve on GM. We predict that will continue, except for hard drive which was affected by tragic situation in Thailand. We will have to pay more for drives.
5:25: Did hard drive affect Mac sales? Will it impact revenue?
Tim Cook: Not material supply or cost affect. For March, we’re not expecting material supply. Prices have increased. We’ve included that in guidance.
5:26: Key components like NAND, etc? How favourable pricing for them?
Tim Cook: Not confirming pct you gave out. We had better cost than we had in our guidance, in particular on display.
5:28: Question on iPad. Any impact from lower price tablets? How do you thnk of competition from Amazon?
Tim Cook: We’re really happy w/ 15.4 million iPads. We took down channel inventory. Sell thru slightly higher than that. We think this is a huge oppty for Apple over time. There will come a day when tablet market in units bigger than PC. Clear from IDC data on desktop that tablets exceed desktop PCs in last quarter. Significant momentum. Ecosystem for iPad in a class by itself. Take advantage of larger canvas. Only a few 100 apps for competition. People want to do multiple things. We don’t see limited function tablets in the same category. Clearly customers that buy those, they’ll see a fair number. I dont think peopel want that, they’ll buy iPads. Last year was supposed to be year of competition. It was year of iPad for second year in a row. We’re going to innovate in this area, and we’ll compete with anyone in this space.
5:31: Tim Cook: Each iPhone was important to hitting 37 million. We’re happy with that. iPhone 4S most popular. In post-paid. Smaller difference in what customer paid. In pre-paid much bigger. Hard to tell how this will play out. Thrilled with total result. We’re into details in each country to learn what we need to do better.
5:33: Toni Sacconaghi (spelling?) asking about cash …
Peter Oppenheimer: We have always discussed, we recognise cash growing. Cash discussions “active” about what to do. Nothing to announce today.
5:34: Toni: Is there a timeframe?
Peter: When we have something to announce, we will announce. Actively discussing.
5:34: Toni asking about growing GM on Q/Q basis as it affects guidance.
5:35: Peter: Factors that affect sequential decline. Loss of leverage from revenue. Against fixed cost significant impact. Dollar stronger. 44.7 is a high high, higher than I’ve seen in 15 years w/ Apple. Diff commodity cycles, diff currency cycles. Last year sequential increase in iPhones, contributed to GM, don’t see that this year.
5:37: Munster asks about Apple TV …
Tim Cook: Apple TV doing well. Just over 1.4 million units last quarter. In terms of revenue, it’s a hobby. “I couldn’t live with out it” (the latest Apple TV.) Other than that, no comments.
5:38: Munster asks about Cook’s first 4 months as CEO. Any comments?
Tim Cook: Love working at Apple, working with these people. I am lucky.
5:39: Another question about cash, and another dodge from Peter Oppenheimer.
Question for Tim: Discussions around iCloud. Try to get perspective. How is it adding value? What are metrics if its successful?
Tim: Peter shared earlier numbers, already over 85 million. Incredible in just a few months. Response incredible. Solved a lot of problems customers having, made their lives much much easier. Fundamental shift. recognise people have multiple devices. Not a product, a strategy for next decade.
5:41: Question about China …
Tim: At over 130K points of sale around the world. That’s carriers, our own distribution. KDDI in Japan, Sprint in U.S. Those carriers can speak for their own results. We’re please with our results. Incumbents did well. Nothing to say in terms of China expansion, but extremely important. Look to grow it further.
5:43: Peter: iPad year over year increase, down Q/Q. Same with iPhone. Mac, iPod down sequentially. 5 reason why revenue down greater % this year. 1st: December had a 14th week. That was 1/14th of Dec Q revenue. That week was in March last year. Will not be in this MArch quarter and its usually stronger than any other March week. Last year increased iphone inventory in March quarter, which helped. Q4 this year benefited from iPhone 4S.
5:46: Cross Research wants to know about cash and acquisitions. What up with Anobit?
Peter: We have done acquisitions of smaller/medium sized companies. Great start on product or technology. Sometimes includes IP. Tend to do several a year. Very very disciplined in how we do it. Our track record strong.
5:47: How do they get integrated?
Tim: We don’t believe in a lot of divisions. We run company as one. Semi conductor works for Bob Mansfield. So Bob and his team integrating Anobit into that team. Anobit has technical talent, we’re lucky to have them.
5:49: Tim talking about selling Apple products around the world thru resellers. Ton of energy in China. Less energy elsewhere. Huge oppty for us in Brazil. We’re going deeper. Doesn’t mean an App Store is coming. Don’t envision that occurring in the near term.
5:50: Tim: In terms of more carriers, you can bet we’re looking at same list you are. In terms of major carriers, list is smaller. Your list is of smaller carriers, but I’d like to get into all of them over time.
5:51: Question on iPad outpacing expectations. Does Apple benefit from lower cost tablets? They come to market and trade up to iPad? Will that happen with Ultrabooks?
Tim: I looked at data in U.S. after Kindle Fire launch. Not an obvious affect plus or minus. I’ve heard that theory from some customers. Whether that’s happening on a very large basis? I don’t know. Looking at our data, there was no obvious change in the data. There is cannibalization of the Mac by iPad, but continue to believe cannibalise Windows PCs. We love that trend, good for us. Thing about Ipad, seeing it almost everywhere. In education k-12, iPad sold 2X Mac. Generally speaking education is slow, so surprising. Also, consumer moved to iPad. It’s winning market by market.
5:56: RBC Capital asking about Android v. iPhone. Is this a two horse race? Can you fight?
Tim: Wouldn’t classify as Mac and Windows at all. Mac outgrown for 20 quarters, but still a single digit of market. If you look at iOS, over 315 million IOS devices. Compares to anything. Over 62 million in last quarter. Don’t have comp numbers on Android. Can’t get crisp reporting that is transparent and straight forward … it seems like all data I’ve seen in the U.S. would say it’s a close race in iPhone. On iPhone, I think all data, we inhernetly believe iPad way ahead. No comparable to iPod Touch. iOS doing extremely well. Not a two horse race. A horse in Redmond that always suits up and always runs.
We can focus on innovating and making the best products and ignore how many horses there are.
6:00: Tim Cook: We just sold a record number of iPhones. A lot of people out there that love what we’re doing.
AND THAT IS IT
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