Apple releases Q3 2013 numbers, cites $35.3 billion in revenue, $6.9 billion profit

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Date: Wednesday, July 24th, 2013, 06:17
Category: Finance, News, retail

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There wasn’t massive growth, but the numbers were still good.

Per Macworld, Apple reported sales of US$35.3 billion, with net profit at US$6.9 billion for its third fiscal quarter. That translated to earnings of US$7.47 per diluted share. Apple’s revenue marked a record for the June quarter, ticking up 1 percent from the $35 billion Apple posted in last year’s third quarter. Still, profits fell 22 percent year-over-year, down from US$8.88 billion in 2012. Apple also reported a drop in profit during its fiscal second quarter of 2013.

With a tiny increase in revenue but a drop in profit, you’d rightly conclude that Apple’s gross margin dropped: For the quarter, it was 36.9 percent, versus 42.8 percent on the year-ago quarter. That’s because Apple’s most popular products now have lower margins than the top-sellers a year ago.

The company also says it has issued US$18.8 billion in cash to shareholders through dividends and buybacks.

While Apple generally keeps a tight lid on future product announcement, company officials did reiterate a point made during its second-quarter earnings announcement in April—that the company plans to roll out new products starting this fall and into the next year. “We are laser-focused and working hard on some amazing new products,” CEO Tim Cook said in an statement accompanying Apple’s earnings announcement.”

Apple says it sold 32.2 million iPhones—a record for the June quarter. That’s up from 26 million iPhones in the year-ago period. For the U.S., iPhone sales rose 51 percent year-over-year, Apple says.

The picture was less rosy for iPad sales, but Apple has a perfectly reasonable explanation for the 14 percent drop in tablet sales from last year’s third quarter. A year ago, Apple introduced the third-generation iPad and enjoyed a full quarter’s worth of sales to the tune of 17 million units. This quarter, sales fell to 14.6 million iPads.

Still, Apple has plenty of reason to remain bullish on the iPad. Company chief financial officer Peter Oppenheimer said that the iPad ranked tops in a 2013 U.S. tablet satisfaction survey by JD Power and Associates. And during the quarter, the company inked a deal with the Los Angeles Unified School District, the second largest district in the U.S., to roll out iPads to 640,000 students.

In fact, the iPad got the bulk of the credit for a strong quarter of sales to U.S. schools. According to Oppenheimer, the last three months generated the highest quarterly revenue ever for Apple’s U.S. education institution business.

Mac sales also fell in the quarter, down 7 percent from last year to 3.8 million units. Still, Oppenheimer pointed out that the 3.8 million Macs sold beat Apple’s own expectations. And Apple’s sales still were ahead of the total PC market, which saw sales contract by 11 percent according to estimates from research firm IDC. By Apple’s math, the Mac gained market share during the quarter.

The Mac was one of the few product lines to see any changes during the quarter, with Apple updating its MacBook Air lineup at the beginning of June by adding new Intel processors. Company executives had little to say about any impact those new laptops had on overall Mac sales, but Oppenheimer did call it the most successful MacBook Air launch to date, adding that customer response was great.

But during the call, executives implied that there were better things to come. Oppenheimer noted that June’s Worldwide Developers Conference included previews of both the Mac Pro and the next version of OS X, code-named Mavericks.

The iTunes Stores—which includes the App Store, Mac App Store, iBookstore, and the music, movies, and TV sections of iTunes—generated $4.3 billion in billings, Oppenheimer said, culminating in the best week and best month ever for App Store. That translated to quarterly revenue of US$2.4 billion, up 29 percent year over year. Total quarterly revenue from iTunes, software, and services generated US$4 billion in revenue.

Oppenheimer said that Apple now has over 320 million iCloud accounts, and 240 million Game Center accounts.

As for brick-and-mortar retail efforts, the Apple Store saw revenue of US$4.1 billion for the quarter, virtually unchanged from the year-ago quarter. Oppenheimer reported that Apple saw 16,000 visitors per store each week.

For the quarter, Apple had an average of 405 stores, with average revenue per store at US$10.1 million, down US$1 million from the year-ago quarter. Apple opened six stores across five countries during the quarter, giving it 408 stores around the globe; 156 of those outlets are outside the U.S.

The company plans to open nine new stores during the September quarter, giving it 27 new openings during the 2013 fiscal year. It’s not just about new stores, however: Apple says that it relocated four of its stores to more appealing spots; it will complete 23 such relocations before the end 2013 fiscal year in September.

Where stockholders are concerned, the company’s Board of Directors has announced another cash dividend, this one at US$3.05 per share of common stock, payable on August 15 to any shareholder as of August 12.

For the next quarter, Apple is predicting revenue between US$34 billion and US$37 billion, with gross margins between 36 and 37 percent. That sales figure would put Apple’s performance in line with the US$36 billion in revenue it reported in the fourth quarter of 2012. For the coming quarter, Apple also predicts operating expenses will be between US$3.9 billion and US$3.95 billion, with a tax rate of 26.5 percent.

Stay tuned for additional details as they become available.

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