apple today announced financial results fourth calendar quarter of 2011 , first fiscal quarter of 2012. quarter, apple posted revenue of $46.33 billion , net quarterly profit of $13.06 billion, or $13.87 per diluted share, compared revenue of $26.7 billion , net quarterly profit of $6 billion, or $6.43 per diluted share, in year-ago quarter. gross margin 44.7 percent, compared 38.5 percent in year-ago quarter, , international sales accounted 58 percent of quarter's revenue. apple's quarterly profit , revenue both company records.
apple shipped 5.2 million macintosh computers during quarter, unit increase of 26 percent on year-ago quarter. quarterly iphone unit sales reached 37.04 million, 128 percent year-ago quarter, , company sold 15.4 million ipods during quarter, representing 21 percent unit decline on year-ago quarter. apple sold 15.43 million ipads during quarter, 111 percent on year-ago quarter. apple set new company records iphone, ipad, , mac sales during quarter.
apple's guidance second quarter of fiscal 2012 includes expected revenue of $32.5 billion , earnings per diluted share of $8.50.
apple provide live streaming of q1 2012 financial results conference call @ 2:00 pm pacific, , macrumors update story coverage of conference call highlights.
conference call highlights
- highest quarterly revenue , earnings in apple history.
- numerous new records quarterly iphone, ipad, , mac sales
- extremely pleased momentum of business
- sales aided inclusion of 14th week in quarter.
- net income increased 118% year-over-year, equal half of net income generated on of fiscal 2011
- set new records desktops , portables, 26% year-over-year versus 0% growth entire pc industry
- mac sales outgrew market in geographies, particularly in asia-pacific
- strong growth of macbook pro , macbook air
- 3-4 weeks of mac channel inventory
- mac app store great success, 100 million downloads in first year
- 15.4 million ipods vs 19 million in year-ago quarter. ipod touch accounts more half of ipods sold. ipod market share remains on 70% according npd.
- ended quarter 4-6 weeks of ipod channel inventory.
- itunes store generated $1.7b of revenue. 20 million song catalog. itunes customers "amazingly busy" on christmas, more 140 million downloads on december 25
- iphone represented 124% year-over-year growth vs 40% growth industry according idc.
- royal dutch shell, credit suisse, covidian, nike, facebook, among others, rolling out iphone across enterprise.
- ipad revenue 99% year-over-year.
- ipad sales exceeded expectations, sell through exceeded sell-in 200,000 units. 4-6 weeks of channel inventory.
- enterprise actively using ipad custom apps.
- 1.5 million ipads in use across educational institutions.
- 315 million cumulative ios device sales. 62 million in december quarter.
- 85 million icloud customers signed up.
- app store "incredible successful" - 550,000 apps total, 170,000 ipad apps.
- $4 billion developers cumulatively, $700 million in december quarter.
- $6.1 billion retail, large growth iphone, ipad , mac sales.
- iphone sales doubled year-over-year iphone 4s.
- 1.1 million macs sold vs 851,000 year-over-year.
- 4 new stores including grand central , 3 stores in europe. 361 stores total.
- 358 stores open, avg $17.1 million in revenue $12 million last year.
- store traffic reached 110 million vs 76 million year-over-year, 45%.
- 22,000 visitors per store per week.
- easypay checkout process enhanced ability handle high traffic levels.
- total company gross margin 44.7%, 4.7% higher guidance. lower commodity costs, better expected iphone mix, among other items.
- $370 million in stock based compensation expense.
- 25.25% tax rate quarter.
- $97.6 billion in cash , marketable securities, $16 billion prior quarter. $64 billion of cash offshore.
- "actively discussing" uses of cash balance, have nothing disclose today. "not letting burn hole in our pocket."
- next quarter's expectations: $32.5 billion in revenue, 42% gross margin $60 million in stock based compensation, $3.05 billion in capex, 25.25% tax rate. eps of $8.50.
q&a
q: iphone momentum quarter ended? what's included in guidance first half of year?
a: thrilled 37 million iphones sold. substantially above 20 million unit-record previously. "breathtaking customer reception iphone 4s" , siri , camera. customers "absolutely love" phone. attribute bold bet demand be, turns out, being bold bet, short of supply throughout quarter. did end significant backlog on iphone. situation has alleviated some, still short in key geographies.
attribute performance delayed purchases prior quarter well. made correct decision go broad range of iphone models, benefit thought would. 14th week helps well, though knew that.
geographically saw strength in every key region, in particular , japan got going in quarter. had more sales days countries. no iphone 4s sales in mainland china last quarter, either.
q: pent-up demand @ end of december in countries , japan had phone quarter? or other countries didn't have phone? how component pricing rebuild inventory , other issues?
a: don't want comment on current sales trends. we've included in our guidance. we've launched in china , demand there has been "staggering". selling through our online store -- not selling in retail store -- demand off charts. happy demand response in china. other countries launched earlier quarter smaller. we'll see how things go supply/demand perspective. we've made progress end of quarter through today. countries aren't caught up.
component environment favorable, 1 of reasons overachieve on gross margin. predict continue on components except hard drives still affected thailand. don't anticipate having material supply issue quarter, though pay more supply make sure have enough.
q: did hard drive situation in thailand have impact on mac sales?
a: december quarter there not material supply or cost impact result of flood. march quarter, we're not expecting material supply impact. included expected increases in hard drive prices in our guidance.
q: saw price declines in dram , nand flash. how favorable expect pricing commodities in march quarter?
a: did receive better costs had rolled our guidance last quarter, particularly on nand flash , dram , displays. price trends should continue favorable quarter. reflected in our guidance. big exception hard drive constrained on industry-wide basis. can navigate supply issue paying more hd's.
gross margin drop next quarter because of loss of leverage , non-recurrence of one-time items , stronger dollar. 2 of items represented quarter of upside gross margin. half commodity costs , one-quarter better mix in iphone sales.
q: impact on ipads lower priced tablets on market? how feel amazon fire?
a: happy 15.4 million ipads, did take down channel inventory sell-through higher that. consistent our long-term belief huge opportunity apple on time. believe there come day when tablet market in units larger pc market. it's interesting note in it's clear idc data on desktop pc's in tablets exceeded desktop sales last quarter in us.
can see different indicators there significant momentum in space. ecosystem ipad in class itself, believe in optimizing applications day 1 take advantage of larger canvas day-one. few hundred apps designed competition versus 170,000 apps ipad. don't see limited function tablets , e-readers in same category ipad. people want ipad won't settle limited function tablet. last year supposed year of tablet. think people agree year of ipad second year in row.
we're going continue innovate crazy , think can continue compete shipping tablets or might enter market in future.
q: learning price elasticity iphone offering 3gs free postpaid , prepaid market? how thinking you've had quarter lower price points?
a: each model of iphone important in achieving 37 million total units. we're glad cover broad range great products. iphone 4s popular among those. in postpay market, there smaller difference in customer pays prepay market. thrilled total result.
q: you're "actively discussing" use of cash. same discussion historically, or new?
a: have discussed our cash , recognize our cash growing right reasons. characterize our discussions "active" makes sense cash balance. don't have announce today.
q: there time-frame or tell when you've finished discussions?
a: let know when decide something. until then, actively discussing.
q: gross margin has been rising q1 q2 traditionally. it's bucking trend drop of 270 basis points. loss of leverage significant, or missing?
a: factors affect sequential decline 3 things: loss of leverage revenue -- reported $46.3 billion quarter 14th week. fixed costs have impact, one-time items won't repeat, , strong dollar have biggest affect. 44.7% highest gross margin we've ever had, have different currency levels , different product cycles before -- did have sequential increase in iphones last year, don't see happening again year.
q: how should thinking strategy in living room?
a: apple tv doing well. last fiscal year sold bit above 2.8 million units. in past quarter, set new quarterly record @ more 1.4 million. in scheme of things, still classified "hobby". continue add things it, , don't know couldn't live without it. continue pull strings , see takes us.
q: you've been ceo 4 months now. wonder read on new job is. have come across things didn't expect?
a: love apple , it's reminder every day privilege work people incredible. how lucky am. can see our results , think our team doing fantastic job.
q: perspective on how you're framing thoughts dividends , buybacks?
a: we're examining possibilities our cash balance. can supply chain or acquisition perspective. don't have comment buybacks or anything. we're actively discussing our cash balance.
q: thoughts on icloud?
a: it's not product. it's strategy next decade.
q: on distribution of iphone, in particular china next few quarters?
a: 130,000 points of sale throughout world, 35% year-over-year. consistently adding points of distribution. adding both carriers , key retailers. added carriers last quarter, adding kddi in japan , sprint in us. extremely pleased both companies. incumbents did incredibly well, in terms of china, china unicom continues key partner. nothing announce on expansion there.
q: why steep revenue drop next quarter?
a: 5 reasons down greater sequentially quarter. december quarter included 14th week year. week accounted 1/14th of december's revenue. week fell within march quarter last year , not included year. sales in week greater average march quarter. last year, increased iphone channel inventory 1.7 million units in march quarter. december quarter results benefitted launch of iphone 4s. there significant pent-up demand , our fastest iphone rollout ever. dollar has strengthened in recent weeks, particularly against euro. last year dollar relatively flat within time period. feel momentum our business.
q: thoughts on acquisitions, in particular anobit?
a: aim smaller or medium-sized companies engineering or technology or talent or ip. that's acquisitions we've done. tend several per year we're disciplined.
q: can talk how they're integrated company? become encompassed within apple or remain standalone divisions?
a: don't believe in lots of divisions. run company "one" rather lots of mini-companies. semiconductor team works bob mansfield hardware engineering company. bob , team integrating anobit team. anobit has fantastic technical talent , we're fortunate have them join us.
q: you're @ 235 carriers, there 500 carriers in world. strategy adding more of them? , on country-rollout, you've addressed part of china on retail side, , brazil next. addressing india or russia more aggressively retail presence?
a: we're selling in brazil through carrier partners , online. we're selling in russia through carrier partners , reseller partners. we're selling in india through carrier partners , reseller partners. i've tried clear in past have our time , energy in china @ moment. we're not ignoring others, we're spending less time in others. brazil next country, we've begun go deeper in country. don't envision apple retail in near-term. in india, we're small, revenue 3x last quarter that's on small base. we're beginning see traction in of these countries. recognize have work large revenue figure china is.
nothing specific announce on carriers, can bet we're looking @ same list are. major carriers, numbers small versus smaller carriers. same true of smaller countries we'd of them on time.
q: iphone great, ipad growth outpaced our expectations too. think apple benefitted lower-cost, reduced feature-set tablets? people coming in , saying "well ok" trading ipad?
a: we've looked @ data on weekly basis after amazon launched fire. there wasn't obvious effect on numbers either plus nor minus. we've heard customers looked @ fire , decided buy ipad, whether that's happening on large basis, don't know. looking @ our data in us, there no obvious change in data it's worth. there cannibalization of mac ipad continue believe there more cannibalization of windows pc's ipad , there many more cannibalize. love trend, think it's great us. thing that's different ipad can continue see emerging virtually everywhere. large percentage of fortune 500, still large looking @ global 500. in education , k-12 sold twice number of ipads macs. education traditionally adopts technology slowly, that's surprising. consumer has adopted ipad well.
it's winning market market. consumers @ , think ecosystem , huge advantages , overall customer experience, think win fair number of those. results speak themselves. sold 55 million ipads since april of 2010 when launched it, feel incredible.
q: seeing accelerated refresh rates within customer base? customers buying iphone faster or buying macbook air faster?
a: iphone has been catalyst in enterprise. ipad follows iphone , in cases mac follows that. 1 product pulls other, pulls other, pulls other. how it's happening difficult put our finger on. many customers across consumer or education or enterprise pointing out. we've seen before halo ipod created mac in 2002-2004 range. it's not phenomenon that's new us.
q: android vs iphone, becoming two-horse race mac vs windows? how integrated model vs oem market windows?
a: don't view mac/windows. mac has outgrown market 20 quarters in row, still single digits in worldwide market. in ios, we've sold 315 million devices , comparison favorable us. 62 million of done in last quarter alone. haven't found way crisp quarterly reporting android do, transparent , reliable. if @ npd data, in october/november, phones, iphone 43% , android 47%. nielsen data shows iphone oct/nov/dec @ 45% vs android @ 47%. comscore data oct/nov iphone @ 42% vs android @ 41%. data in shows close race on iphone. on ipad side, think of inherently believe ipad way ahead there. there no comparable product ipod touch either. ios doing extremely well. wouldn't it's 2 horse race. there's horse in redmond , keep running , there other players won't count out.
focus on innovating , making world's best products , ignore how many horses there are. want stay ahead , lead one.
q: 4g , larger screens growing in market. has popularity of larger screens on android phones changed or impacted view? , 4g, phones have battery life issues, think?
a: sold 37 million iphones , have sold more supply. there lot of people out there we're doing.
article link: apple reports best quarter ever in q1 2012: $13.06 billion profit on $46.33 billion in revenue
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