Apple Reports Q4 2011 Results

Apple on Tuesday posted yet another record quarter to conclude its fiscal year 2011, led by continued growth of its iPad and Mac platforms and Apple sold 17 million iPhones, down 16% from the record 20.3 million it sold in the second quarter 2011 and also significantly off Wall Street estimates of 20 million to 22 million. iPad sales during the September quarter were 11.12 million, an increase of 166 percent from the year-ago quarter and Mac sales were the highest ever at 4.89 million for the three-month span. Apple’s cash pile on hand also continued to swell during the quarter and now stands at around $84 billion………………..

 

Apple announced financial results for its fiscal 2011 fourth quarter ended September 24, 2011. The Company posted quarterly revenue of $28.27 billion and quarterly net profit of $6.62 billion, or $7.05 per diluted share. These results compare to revenue of $20.34 billion and net quarterly profit of $4.31 billion, or $4.64 per diluted share, in the year-ago quarter. Gross margin was 40.3 percent compared to 36.9 percent in the year-ago quarter. International sales accounted for 63 percent of the quarter’s revenue. The Company sold 17.07 million iPhones in the quarter, representing 21 percent unit growth over the year-ago quarter. Apple sold 11.12 million iPads during the quarter, a 166 percent unit increase over the year-ago quarter. The Company sold 4.89 million Macs during the quarter, a 26 percent unit increase over the year-ago quarter. Apple sold 6.62 million iPods, a 27 percent unit decline from the year-ago quarter. “We are thrilled with the very strong finish of an outstanding fiscal 2011, growing annual revenue to $108 billion and growing earnings to $26 billion,” said Tim Cook, Apple’s CEO. “Customer response to iPhone 4S has been fantastic, we have strong momentum going into the holiday season, and we remain really enthusiastic about our product pipeline.” “We are extremely pleased with our record September quarter revenue and earnings and with cash generation of $5.4 billion during the quarter,” said Peter Oppenheimer, Apple’s CFO. “Looking ahead to the first fiscal quarter of 2012, which will span 14 weeks rather than 13, we expect revenue of about $37 billion and we expect diluted earnings per share of about $9.30.”

 

Conference Call Highlights:

  1. First earnings call since passing of Steve Jobs. “The world has lost a visionary, a creative genius and an amazing human being. Steve was an amazing mentor and inspired everyone at Apple to do extraordinary things.”
  2. Express our gratitude for condolences and expressions of support following Steve’s passing.
  3. New all time quarterly record for iPad and Mac sales. New September record for iPhone sales.
  4. Strong Mac, iPad and iPhone sales.
  5. Exceed previous Mac record from past December quarter by 750k Macs, 27% increase over year-ago quarter results. Exceeded PC market by 4x.
  6. Strong growth in MacBook Air and continued strong performance by MacBook Pro.
  7. Record Mac desktop sales due to strength of iMac.
  8. 6 Million Lion downloads in September quarters.
  9. 3-4 weeks of Mac channel inventory.
  10. 6.6 million iPods, vs 9.1 million last year. Total iPod sales ahead of Apple’s internal expectations. iPod Touch accounts for half of iPods sold. iPod share remains +70% in mp3 market. iPod is top MP3 player in most countries. 4-6 weeks of iPod channel inventory.
  11. iTunes Store generated 1.5 billion in revenue, new record. 16 billion songs, 650 million tv shows downloaded. Pleased with 180 million sales on iBookstore.
  12. Pleased to sell 17.1m vs 14.1m YoY, 21% YoY growth, new Sep quarter record. Strong growth in Asia-Pacific, doubled year over year. Expected sales to fall after iCloud and iOS 5 announcement in June. Sales fell over quarter, especially in the second half. 4-6 weeks iPhone channel inventory at end of quarter.
  13. Opted to defer new carrier and country additions to next quarter due to iPhone 4S.
  14. 230 carriers in 105 countries supporting iPhone.
  15. 6th consecutive time Consumer Reports lists iPhone with highest customer satisfaction.
  16. 93% of Fortune 500 deploying or testing iPhone, up from 91% last quarter. 60% of global 500 testing or deploying iPhone.
  17. – Lists a number of enterprise customers supporting iPhone extensively.
  18. “Extremely enthusiastic” about Siri. Customers love A5, new camera.
  19. “Working hard to get iPhone 4S in customers hands as quickly as possible.”
  20. Thrilled with iPad momentum. New record with 11.1m iPad sales, compared to 4.2m YoY.
  21. Tablet market is huge opportunity for Apple. Very excited for customer enthusiasm and our current performance. iPad launched in 28 countries, distribution in 90 countries total. $6.9 billion in iPad and iPad accessory revenue, up 146% YoY. 2.5 million iPads in channel inventory, up 1.45 million sequentially. 4-6 weeks of inventory.
  22. 92% of Fortune 500 testing or deploying iPad, up from 86%. 52% of Global 500 testing or deploying, up from 47% last quarter.
  23. 250 million cumulative iOS devices sold.
  24. App Store joins 22 more countries during the quarter, 123.
  25. Retail Stores have very strong YoY growth in Mac and iPad sales, offset by decline in iPhone sales. 1.1m Mac sales vs 874k YoY, increase of 25%. Half Macs sold in retail stores were to customers new to Mac. 30 new stores in the quarter, 21 internationally. Highest opening day for Mac sales ever in Hong Kong. All China stores are highest traffic and among highest revenue.
  26. 357 stores, 10.7 billion in average revenue per store. 679 million in segment margin.
  27. Record 77.5 million visitors in the quarter.
  28. FY 2012: Focus on international expansion for retail. 40 stores in FY 2012, three quarters outside the US.
  29. Will be expanding or replacing stores in the US that are too busy or too constrained to be effective.
  30. OpEx – $2.7 billion, $253 million in stock based compensation. 24.7% tax rate on the quarter.
  31. $81.6 billion in cash and marketable securities, up $5.4 billion from prior quarter. Net of cash paid for Nokia Settlement and Nortel patents.
  32. Predictions for December quarter will be 14 weeks long, vs 13 weeks normally. Rev to be $37 billion. 40% margin. OpEx to be 3.25 billion. Tax rate to be 24.25%. EPS: $9.30
  33. Yearly profit up 85% vs 2010, growing faster than revenue growth.

 

Apple Q4 Earnings Call:

  • $28.7 billion in Q4 revenue
  • $6.62 billion in Q4 net profit
  • $7.05 per diluted share
  • 17.1 million iPhones sold in Q4
  • 11.12 million iPads sold in Q4
  • 6.6 million iPod sales sold in Q4
  • 18 billion App Store downloads
  • 180 million iBookstore downloads
  • 6 million Lion downloads, since its release this summer
  • 4.89 million Macs sold in Q4
  • $10.7 million average revenue per Apple Store
  • $108 billion in revenue for fiscal year, 66% growth over FY10
  • 77.5 million Apple Store visits in Q4
  • 16% of Apple’s revenue came from China
  • 500,000 apps available on the App Store, available in 23 countries
  • Apple has $81.6 billion cash available
  • 13% of Apple’s revenue from retail
  • iPhone sales up 21% year over year
  • 93% of Fortune 500 deploying or testing iPhones
  • Apple set a $37 billion guidance for fiscal Q1 (holiday)
  • 16 billion songs downloaded from iTunes
  • iPad 2 available in 90 countries
  • 25 million iOS device sold in Q4
  • 357 Apple Stores world-wide
  • $3.6 billion in revenue from Apple Stores
  • iPod still has >70% share in U.S. 10 years after introduced
  • Apple plans to add 40 new Apple Stores next Q, 3/4 outside of U.S.
  • All five stores combined in China have the most traffic
  • iPhone 4S available in 7 countries, 22 more on their way
  • 30 new Apple stores were added in Q4

 

Thanks: (1), (2)

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