Apple releases Q4 2013 numbers, shows $7.5 billion profit, but relatively flat year-over-year sales

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Date: Tuesday, October 29th, 2013, 02:06
Category: Finance, News

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A US$7.5 billion quarter is nothing to sneeze at, but the sales were a bit flat compared to a year ago.

Per Macworld, Apple wrapped up its 2013 fiscal year Monday with a US$7.5 billion profit on US$37.5 billion in revenue, reporting accelerating growth buttressed by strong iPhone sales and growth in the Chinese market. Compared to the same quarter a year ago, iPhone sales were up, iPad sales were flat, and Mac sales were down.

Apple announced that its revenues in its fiscal fourth quarter (ending September 28) were up four percent compared to the same quarter in 2012. That was good enough to once again beat most analyst estimates. But year-over-year profits fell eight percent.

The iPhone continued to be the prime mover in Apple’s fiscal world. The company said it sold 33.8 million iPhones—a record for the September quarter—compared to 26.9 million in that quarter last year. iPad unit sales were relatively flat at 14.1 million, up 100,000 from the year-ago quarter. And once again, Mac unit sales were down year-over-year, from 4.9 million in last year’s fourth quarter to 4.6 million this year. (Mac unit sales were lower every quarter this year compared to the same quarter the year before.) In fact, revenues from all Apple product lines except for the iPhone and for iTunes, software, and services were down year-over-year.

The good quarterly sales for the iPhone were no doubt goosed by the introduction of the iPhone 5s and 5c, which famously sold nine million units all by themselves in their debut weekend. The new iPhones were on sale for the last nine days of the quarter. Overall, iPhone unit sales were up eight percent over the previous sequential quarter, and up 26 percent over the year-ago quarter.

For the overall fiscal year 2013, iPhone net sales rose 13 percent (from US$80.4 billion to US$91.3 billion). At the same time, iPhone unit sales climbed 20 percent (125 million to 150 million). Overall, iPhone contributed 53 percent of Apple’s revenues, up 51 percent in 2012 and 43 percent in 2011; iPhones contributed more than half of all Apple revenues in every quarter of 2013.

iPad sales for the year were a mixed bag: While unit sales were up robustly (climbing 21 percent, from 58.3 million tablets to 71 million), net sales rose more anemically, from US$30.9 billion to just under US$32 billion. That revenue reduction can likely be chalked up to the introduction of the lower-cost iPad mini last fall. (With the introduction of the new-model iPad Air and iPad mini, due to ship in November, Apple’s next quarter will likely be quite impressive on the iPad front.)

Mac sales actually declined for the fiscal year as a whole. Unit sales dropped 10 percent in 2013 compared to the 2012 fiscal year (from 18.1 million to 16.3 million); net sales fell 8 percent (from US$23.2 billion to US$21.4 billion). Remember that there were actually very few Mac product introductions in 2013, beyond some tweaks to the MacBook Air line. Yet, as Apple CFO Peter Oppenheimer pointed out in the conference-call with analysts that accompanied the release of the results, the Mac has increased its share of the PC market in 29 of the past 30 quarters. In a rapidly shrinking market, a slow loss can look like growth.

The iPod is still selling, but in such relatively insignificant quantities that it doesn’t even merit a mention in Apple’s earnings call. That could be because it’s contributing just 3 percent of Apple’s overall revenues these days.

Much of Apple’s business is seasonal, spurred on by fall product announcements and massive holiday-quarter sales. But there’s one part of Apple’s business that just keeps growing, quarter by quarter, seemingly impervious to seasonal fluctuations. It’s the iTunes/Software/Services revenue line, which has grown more or less continuously every quarter. For the most recent quarter, it generated 4.26 billion dollars, up from 3.5 billion in the year-ago quarter. iTunes/Software/Services revenue has doubled in size in the past three years, from US$2.15 billion in the first quarter of 2011.

Apple’s retail segment is most definitely a seasonal business, but it’s showing strong growth. In fiscal 2012 Apple’s retail outlets generated US$15 billion in revenue; in fiscal 2013 that number wasUS $20 billion.

During Monday’s conference call, one analyst commented that Apple was one of the very few companies he was tracking to show strong growth in China this past quarter. Indeed, while Apple’s revenue in the Americas was actually down from the previous sequential quarter, many other key Apple segments showed sequential growth, most notably China and Japan.

Stay tuned for additional details as they become available.

Apple to release Q4 earning results today, analysts looking for company to beat its own guidance

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Date: Monday, October 28th, 2013, 09:31
Category: Finance, News

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Apple’s Q4 financial results are due in via a conference call today and according to 9to5Mac and Fortune, more than half of the analysts included in Fortune’s survey expect the company to beat its high-end guidance of $37B. The average is driven up by the amateurs, who come in at US$37.38B, while the professionals expect just a touch under the top end at US$36.95B.

Predictions on both revenues and earnings do vary markedly, however. While the consensus view is that year-on-year revenues will be up 3 percent and earnings down 6 percent, even among the professionals the earnings estimates span a 15 percent range.

Apple beating its own guidance wouldn’t have been remarkable in the days when Apple gave absurdly pessimistic guidance and then blew it away, but would be impressive since Cook started offering realistic ranges …

Apple began offering realistic guidance this year, offering a range running from what it has “reasonable confidence” of achieving to what it “believes” it will do. In Q2, Apple slightly beat its high-end guidance of US$41-43B with revenues of US$43.6B, while in Q3 it came in just below its top-end number at US$35.3B.

The official launch of the iPhone in China is the big unknown in the equation, with some big numbers being bandied about, but no hard data.

It’s also likely that supplies of iPhone 5s models will play a large role in the numbers. Demand was extremely strong, but production was struggling to keep pace with the gold model in particular, whose popularity appeared to have taken Apple by surprise.

The earnings will be broadcast at 2 PM PT/5 PM ET via this link.

Stay tuned for additional details as they become available.

Apple to announce Q4 2013 earnings on October 28th

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Date: Tuesday, October 8th, 2013, 06:55
Category: Finance, News

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The financial results are coming.

Per AppleInsider, Apple on Monday announced that it will release its fourth fiscal quarter results immediately following the close of the stock market on October 28.

The results, which cover the company’s operations from July through September, will include the first full week of sales for the company’s sales record-breaking iPhone 5s and iPhone 5c.

As usual, Apple will conduct a conference call to discuss the financial results on Monday, October 28, 2013 at 2:00 p.m. PT / 5:00 p.m. ET. In the last quarterly call, Apple reported earnings of US$6.9 billion on sales of 31.2 million iPhones, 14.6 million iPads, and 3.8 million Macs. That quarter saw Apple doing US$35.4 billion in total revenue.

The forthcoming call will likely give investors and tech industry observers some notion of just how well Apple’s newest iPhones are doing. The devices sold nine million units in just their first three days of availability, and investors will be eager to see how that may impact Apple’s bottom line. The new iPhones, though, were only on sale for the last ten days of the quarter, and their true impact may not be fully felt until Apple’s Q1 FY14 reporting.

Apple, though, did appear encouraged by the performance of its newest handsets. Following the launch weekend for the iPhone 5s and 5c, Apple revised its earnings guidance upward. The company expects its earnings to be near the high end of its previously provided range of US$34 to US$37 billion. It also believes its gross margin will fall at the higher end of its previous range of between 36 and 37 percent.

Stay tuned for additional details as they become available.

Apple confirms purchase of Cue, has yet to disclose final sale price

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Date: Friday, October 4th, 2013, 07:04
Category: Finance, News, Software

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It’s hard to say exactly WHAT Apple will do with Cue, but there’s some interesting possibilities.

Per AppleInsider and TechCrunch, Apple is said to have purchased Cue, a startup company behind a personal assistant app for iPhone which shut down just this week.

An anonymous source claimed on Thursday that Apple is buying Cue, which was formerly known as Greplin, for between US$50 million and US$60 million. The startup was a Y Combinator venture capital alumnus that reportedly obtained funding from both Sequoia Capital and Index Ventures.

The source shared that although Cue never disclosed their latest funding round, the company allegedly raised US$10 million from Index Ventures. The information provided could not be independently verified, and Apple declined to comment.

As of Thursday, Apple affirmed the acquisition, but as usual declined to offer specifics. Cue’s functionality was much like that of Google Now or Apple’s new iOS 7 contextual notifications, though it debuted before both of those services.

Cue announced to its users on Tuesday that the service is shutting down and is no longer available. Cue Premium users who bought a paid subscription, either through official iOS app or the company’s website, will receive a prorated refund.

“We apologize for any inconvenience this might cause you,” the company said. “It’s been an incredible journey that wouldn’t have been possible without your loyal support.”

Cue’s functionality was much like that of Google Now or Apple’s new iOS 7 contextual notifications, though it debuted before both of those services.

Originally founded as “Greplin”, the company would index content from social networking sites like Facebook and Twitter, as well as pulling data from Gmail. For example, a single search for “Jim” would surface contacts from the user’s LinkedIn account, emails from Gmail, and documents from Dropbox.

The company transitioned in 2012 to become Cue, and offered a personal assistant application for Apple’s iOS that would automatically turn data such as flight or restaurant reservations into a daily agenda. Cue would accomplish this by collating and indexing a user’s contacts, files, and emails, then display important and timely information. The company was founded by entrepreneurs Daniel Gross and Robby Walker.

Cue was formerly run by Greg McAdoo, who was also previously associated with Bump, a company acquired by Google earlier this year for at least US$30 million. McAdoo has since moved on to become a venture capitalist at Sequoia Capital.

There’s no word as to how Apple will incorporate Cue’s technologies, but it’s another part of the company’s arsenal for somewhere down the road.

Stay tuned for additional details as they become available.

Apple purchases swedish firm AlgoTrim, snags image, video compression assets for mobile devices

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Date: Wednesday, August 28th, 2013, 07:49
Category: Finance, News

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The Apple shopping spree continues.

Per Rapidus.se and TechCrunch, Apple has purchased a Swedish firm called AlgoTrim for an undisclosed price. The small company specializes in image and video, specifically JPEG, compression techniques on mobile devices which allow faster processing of images on power-constrained mobile devices.

AlgoTrim develops advanced solutions for mobile devices within the fields of data compression, mobile imaging and video, and computer graphics.

These solutions are designed to excel in terms of high performance and small memory requirements, making them ideal for mobile devices. Many solutions offered by AlgoTrim are codecs that are the fastest on the market, for example, the lossless codec for general data compression and the imaging codecs.

Apple could use these codecs in its camera and image viewing and manipulation apps on iOS. It is probable that the cost of picking up the company and owning the technology outweighed the cost of licensing the technology over its hundreds of millions of devices. This also could be an “aquihire”.

Apple is no stranger to the Swedish technology market. It picked up Polar Rose in 2010, a face recognition company and C3, a Swedish 3D mapping company in the run up to its Maps product launch. Cupertino has been on a bit of a startup binge lately buying such companies as Embark and Matcha.tv.

Last year, AlgoTrim reported a revenue of US$3.0 million, with an net income before taxes of EUR -1.1 million. Until now, AloTrim has been focused mostly on Android development.

As of now, the acquisition has been confirmed to TechCrunch, Apple offering the following quote:

“Apple buys smaller technology companies from time to time, and we generally do not discuss our purpose or plans.”

Stay tuned for additional details as they become available.

Apple purchases Embark, appears to be adding transit functionality to Maps

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Date: Friday, August 23rd, 2013, 08:34
Category: Finance, News, Software

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Apple’s small-but-really-useful company shopping spree continues.

Per iMore and The Verge, Apple is now reported to have acquired another transit focused app, Embark. While the usual public statements apply, the transaction has reportedly been confirmed to former Wall Street Journal writer, Jessica Lessin:

“We don’t know how much Apple paid for the several-person team it acquired very recently. But we heard from people knowledgeable about the deal that the company plans to directly integrate Embark’s technology into Apple Maps.”

Apple is deeply committed to building out Maps, and a year after launch users are seeing a much-improved product already. But, transit information is one of the next big hurdles, and this acquisition along with the earlier one of HopStop is sure to have a big impact on the future of Maps.

As always, let us know what you make of this in the comments.

Apple purchases content aggregator Matcha.tv, may be planning new features for Apple TV services

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Date: Wednesday, August 14th, 2013, 07:55
Category: Apple TV, Finance, News, Software

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It’s the acquisitions that point to interesting stuff on the horizon.

Per All Things D and VentureBeat, Apple has acquired a small startup called Matcha.tv, which provided a second-screen iOS app connected to various content outlets like cable TV, Internet streams and digital storefronts.

Citing sources familiar with the story, VentureBeat reports that Apple acquired Matcha.tv for an estimated US$1 million to US$1.5 million. As part of the agreement, the firm’s founders will be assimilated into Apple’s team for at least two years.

Shuttered in May, Matcha.tv was an aggregator for content from popular streaming sites, cable TV and digital video stores. The erstwhile app supported Netflix, Hulu, Amazon Prime, iTunes and cable networks like Comcast, among others.

In addition to arranging content, users were able to manage viewed content and receive recommendations for future viewing. A social networking element was also included in-app to generate recommended media and provide a form of interactivity.

While Apple has yet to implement any of the firm’s technology into the Apple TV, the buyout suggests the company could have something brewing for an upcoming software update or even a new product.

Apple has become increasingly interested in expanding its “beloved hobby” beyond its current capabilities. In June, a software update brought HBO GO, WatchESPN, Sky News and other channels to the small set-top streamer. More recently, a report claimed popular music platform Vevo is working on an app that will bring 24/7 music to Apple TV.

Stay tuned for additional details as they become available.

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.

Apple to hold Q3 earnings conference call on Tuesday, July 23rd

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Date: Tuesday, July 2nd, 2013, 06:21
Category: Finance, News

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The numbers tell the truth.

Per MacNN, Apple will hold its next quarterly earnings call with investors on Tuesday, July 23, where it will discuss its fiscal third-quarter results. According to its own estimates, it expects to report between US$33.5 billion and US$35.5 billion, a drop from the previous quarter but a realistic figure in light of no refreshed iPad or iPhone, the two primary drivers of Apple’s income. While the latest MacBook Air revision has garnered significant praise for its various improvements, it emerged at the very tail end of the quarter and thus didn’t influence sales.

Possibly affecting sales of other Apple products is the expected drop in sales that comes ahead of new iOS device models. Apple has already said that new products will be coming this fall, which is taken to mean the latest iPhone, iPad and possibly some entirely new devices — including a long-rumored Apple television or smartwatch. Another keenly-anticipated release is the acceptance of the new iOS 7, not to mention the long-overdue Mac Pro overhaul, which will test how professional users will adapt to the re-designed machine. Primarily, however, investors will be watching to see if Apple can continue its remarkable iOS platform US sales growth in the face of competition and a lack of any new product in the quarter.

In the previous quarter, Apple saw both good news and bad: revenues were up, as were iPad and iPhone sales (above analysts’ predictions), but Mac sales were basically flat and net profit was down slightly for the first time in a decade, a trend that is expected to have continued over the past three months. Analysts have reported that Apple has ordered fewer iPhones for the upcoming quarter, signalling that it expects further erosion of iPhone sales ahead of its eventual announcement of the next model.

Margins are expected to be around 36 percent, with operating expenses bubbling just under US$4 billion. The conference call is schedule to take place at 2PM Pacific/5PM Eastern on July 23.

Stay tuned for additional details as they become available.

Apple reports Q2 2013 profit of $9.5 billion, revenues of $34.6 billion

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Date: Tuesday, April 23rd, 2013, 14:50
Category: Finance, iPad, iPad mini, iPhone, News

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It’s 18% lower than it was last year, but it’s still US$9.5 billion in the bank…

Per AppleInsider, Apple on Tuesday said second quarter profits fell roughly 18% to US$9.5 billion — or US$10.09 per diluted share — despite record second quarter sales of US$43.6 billion — the first year-over-year decline in earnings for the one-time tech darling in nearly a decade.

The results for the three-month period ended March 30, 2013 compare to revenue of US$39.2 billion and net profit of US$11.6 billion, or US$12.30 per diluted share, in the year-ago quarter. Gross margin was 37.5 percent, approximately 100 basis points lower than the 47.4 percent reported in the year-ago quarter, as consumers gravitated to more affordable, lower-margin products like the iPad mini.

During the quarter, Apple sold 37.4 million iPhones and 19.5 million iPads, compared to 35.1 million iPhones and 11.8 million iPads in the year-ago quarter. The company also said it sold just under 4 million Macs, compared to 4 million in the year-ago quarter. Overall, international sales accounted for 66 percent of the quarter’s revenue.

“We are pleased to report record March quarter revenue thanks to continued strong performance of iPhone and iPad,” said Tim Cook, Apple’s CEO. “Our teams are hard at work on some amazing new hardware, software and services, and we are very excited about the products in our pipeline.”

Looking ahead to the current June quarter, Apple provided following guidance:
- Revenue between US$33.5 billion and US$35.5 billion.

- Gross margin between 36 percent and 37 percent.

- Operating expenses between US$3.85 billion and US$3.95 billion.

- Other income/(expense) of US$300 million

- Tax rate of 26%.

“Our cash generation remains very strong, with $12.5 billion in cash flow from operations during the quarter and an ending cash balance of $145 billion,” said Apple CFO Peter Oppenheimer.

For Apple, Tuesday’s results mark the first year-over-year decline in profits since the first quarter of 2003 when the “early 2000s recession” began to set in stateside.

Stay tuned for additional details as they become available.