Fourth-quarter revenue, profit up for Apple on iPhone, iPad sales

Phillip Michaels
26 October, 2012
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Apple ended its 2012 fiscal year with a solid quarter that saw growth for the iPhone and iPad as well as flat Mac sales amid a challenging market for PC makers.

For its fiscal fourth quarter ended on Sept. 29, the company said this morning that it tallied revenue of US$36 billion and net profit of US$8.2 billion—its “highest September revenue and earnings ever,” according to Chief Financial Officer Peter Oppenheimer. Those figures were up 27 percent and 24 percent, respectively, from year-ago sales and profits. That translates to US$8.67 per share during the fourth-quarter, a 23 percent increase from last year.

Apple’s sales topped analysts’ expectations of US$35.8 billion for the quarter, but fell short of the US$8.75 a share earnings that Wall Street was looking for. During the company’s third-quarter earnings announcement, Oppenheimer told analysts to expect US$34 billion in revenue and earnings of US$7.65 a share.

If Wall Street reacts negatively to Apple missing analysts’ earnings expectations, it’s likely to also respond poorly to the guidance Apple gave for the coming quarter, which includes the busy holiday season. Oppenheimer says that Apple is expecting to tally revenue of US$52 billion and report earnings of US$11.75 per share. The revenue forecast would be ahead of the US$46.3 billion Apple recorded for its fiscal first quarter of 2012, but its earnings guidance is significantly below the US$13.87 per share it tallied for the 2012 holiday quarter. Oppenheimer cited a number of factors for the lower earnings forecast: Apple’s first quarter will have only 13 weeks in 2013 as opposed to the 14 weeks in the 2012 quarter; the U.S. dollar is stronger; and gross margins are changing due to the spate of recent Apple product launches.

Record iPhone sales

In a quarter that ended with the introduction of the iPhone 5, Apple says it sold 26.9 million smartphones. That’s an increase of 58 percent from last year’s fourth quarter, a time when Apple blamed rumours of a forthcoming iPhone update for putting a damper on sales. This quarter’s phones sales set a record for the July-to-September time frame, Oppenheimer said.

iPhone sales grew 58 percent over last year. That compares to 45 percent growth for the overall smartphone market.

Apple didn’t break down how many of the phones it sold during the quarter were iPhone 5s. (It previously reported that it had sold 5 million iPhones during the first three days the phone was on sale.) However, Oppenheimer said that demand for the newly launched phone was “phenomenal.”

“Demand for iPhone 5 continues to outstrip supply, and we’re working hard to get more into customers’ hands,” Oppenheimer said during a conference call with Wall Street analysts to discuss Apple’s quarterly performance.

Apple saw US$17.1 billion in recognised revenue from its iPhone business for the quarter. That’s up 56 percent from US$11 billion in 2011’s fourth quarter.

When Apple first announced the iPhone 5, it said it would launch the smartphone in 100 countries by year’s end. CEO Tim Cook told analysts that the company still expected to hit that number.

iPad sales rose 26 percent over last year, with Apple selling 14 million tablets. That’s another September quarterly record, according to Apple.

Mac sales rose a modest 1 percent, with Apple selling 4.9 million Macs during the quarter. That’s a record for the September quarter. More significantly, Apple is one of the few PC makers to see its business expanding: Market-research firm IDC says the overall PC market contracted by 8 percent during the September quarter.

iPod sales continued to decline. The company said it sold 5.3 million music players, down 19 percent. Those figures don’t include the updated iPod touch and nano releases that Apple began shipping two weeks ago.

Global picture

Apple had a particularly strong quarter outside of the U.S., with international sales accounting for 60 percent of its revenue. China continued to be a great market for the company. According to Cook, revenue from China for the quarter rose 26 percent to US$5.7 billion. The company’s Mac business alone in that country grew 44 precent. Portable launches during the quarter helped iPad and iPhone sales grow 45 percent and 38 percent, respectively.

All told, Cook said, China made up about 15 percent of Apple’s business during the 2012 fiscal year.


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