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Apple's massive Q4: $42.1 billion revenue, $8.5 billion profit


News by Luke Jones on Tuesday October 21, 2014.

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iPhone 6 drove revenue
iPhone 6 drove revenue

Apple has announced its Q4 (calendar Q3) results and the numbers are typically outstanding, as good as they have ever been during the September quarter actually. It was the biggest fourth quarter the company has ever recorded while overall earnings and income were up considerably over (the also bumper) third quarter period.

Apple today announced financial results for its fiscal 2014 fourth quarter ended September 27, 2014. The Company posted quarterly revenue of $42.1 billion and quarterly net profit of $8.5 billion, or $1.42 per diluted share. These results compare to revenue of $37.5 billion and net profit of $7.5 billion, or $1.18 per diluted share, in the year-ago quarter. Gross margin was 38 percent compared to 37 percent in the year-ago quarter. International sales accounted for 60 percent of the quarter's revenue.

iPhone sales went through the roof, with the early launch of the iPhone 6 likely to have played a part, while the next quarter should provide a similar scenario (the company has stated revenue guidance for the holiday quarter of $63.5-66.5B, with gross margin of 37.5-38.5%). Apple will be increasingly worried about iPad sales, which continued to decline, falling 12.5% with 12.316 million units sold. Cupertino will likely wait to the next quarter for a better idea of the state of the iPad business; the new iPads were imminent in this period and likely slowed sales of outgoing models. Apple's Mac business continues to thrive, now among the fifth largest PC companies in the world, it is also one of the only ones that is growing.

iPhone: 39.272 million, up 16.2%

iPad: 12.316 million, down 12.5%

Mac: 5.52 million, up 20%

iPod: 2.62 million, down 25.1%

iTunes: $4.208 billion, up 8.2%

Accessories: $1.486 billion, up 12.7%

Totals:

Profit: $8.5 billion

Revenue: $42.123 billion, up 12.4%

EPS: $1.42 per share, up 20.3%

The company's CEO, Tim Cook, was understandably delighted with the figures and had the following to say at the earnings call:

Our fiscal 2014 was one for the record books, including the biggest iPhone launch ever with iPhone 6 and iPhone 6 Plus. With amazing innovations in our new iPhones, iPads and Macs, as well as iOS 8 and OS X Yosemite, we are heading into the holidays with Apple's strongest product line-up ever. We are also incredibly excited about Apple Watch and other great products and services in the pipeline for 2015.

Chief Financial Officer Luca Maestri added:

Our strong business performance drove EPS growth of 20 percent and a record $13.3 billion in cash flow from operations in the September quarter. We continued to execute aggressively against our capital return program, spending over $20 billion in the quarter and bringing cumulative returns to $94 billion.

During this period the company closed on the deal to buy Beats, but it is unclear if that $3 billion payoff is accounted for here. If it is then Apple's numbers would have been even better through the three months quarter. The results drove Apple's shares up over 2% to 99.76%, while through the trading day they often broke $100.

Yesterday analysts threw caution to the wind when predicting how much Apple would earn. In the past analysts have vastly underestimated revenue and sales for Apple, so this week they have thrown conservative estimates out of the window. However, Cupertino still outperformed even the most bullish of estimates, with even the highest being $41.8 billion according to Forbes yesterday.

You can check out the full earnings call below:

Apple Reports Fourth Quarter Results

CUPERTINO, California-October 20, 2014-Apple today announced financial results for its fiscal 2014 fourth quarter ended September 27, 2014. The Company posted quarterly revenue of $42.1 billion and quarterly net profit of $8.5 billion, or $1.42 per diluted share. These results compare to revenue of $37.5 billion and net profit of $7.5 billion, or $1.18 per diluted share, in the year-ago quarter. Gross margin was 38 percent compared to 37 percent in the year-ago quarter. International sales accounted for 60 percent of the quarter?s revenue.

Apple's board of directors has declared a cash dividend of $.47 per share of the Company's common stock. The dividend is payable on November 13, 2014, to shareholders of record as of the close of business on November 10, 2014.

"Our fiscal 2014 was one for the record books, including the biggest iPhone launch ever with iPhone 6 and iPhone 6 Plus," said Tim Cook, Apple's CEO. "With amazing innovations in our new iPhones, iPads and Macs, as well as iOS 8 and OS X Yosemite, we are heading into the holidays with Apple's strongest product line-up ever. We are also incredibly excited about Apple Watch and other great products and services in the pipeline for 2015."

"Our strong business performance drove EPS growth of 20 percent and a record $13.3 billion in cash flow from operations in the September quarter," said Luca Maestri, Apple's CFO. "We continued to execute aggressively against our capital return program, spending over $20 billion in the quarter and bringing cumulative returns to $94 billion."

Apple is providing the following guidance for its fiscal 2015 first quarter:

revenue between $63.5 billion and $66.5 billion

gross margin between 37.5 percent and 38.5 percent

operating expenses between $5.4 billion and $5.5 billion

other income/(expense) of $325 million

tax rate of 26.5 percent

Apple will provide live streaming of its Q4 2014 financial results conference call beginning at 2:00 p.m. PDT on October 20, 2014 at www.apple.com/quicktime/qtv/earningsq414. This webcast will also be available for replay for approximately two weeks thereafter.

This press release contains forward-looking statements including without limitation those about the Company's estimated revenue, gross margin, operating expenses, other income/(expense), and tax rate. These statements involve risks and uncertainties, and actual results may differ. Risks and uncertainties include without limitation the effect of competitive and economic factors, and the Company's reaction to those factors, on consumer and business buying decisions with respect to the Company's products; continued competitive pressures in the marketplace; the ability of the Company to deliver to the marketplace and stimulate customer demand for new programs, products, and technological innovations on a timely basis; the effect that product introductions and transitions, changes in product pricing or mix, and/or increases in component costs could have on the Company's gross margin; the inventory risk associated with the Company's need to order or commit to order product components in advance of customer orders; the continued availability on acceptable terms, or at all, of certain components and services essential to the Company's business currently obtained by the Company from sole or limited sources; the effect that the Company's dependency on manufacturing and logistics services provided by third parties may have on the quality, quantity or cost of products manufactured or services rendered; risks associated with the Company's international operations; the Company's reliance on third-party intellectual property and digital content; the potential impact of a finding that the Company has infringed on the intellectual property rights of others; the Company's dependency on the performance of distributors, carriers and other resellers of the Company's products; the effect that product and service quality problems could have on the Company's sales and operating profits; the continued service and availability of key executives and employees; war, terrorism, public health issues, natural disasters, and other circumstances that could disrupt supply, delivery, or demand of products; and unfavorable results of other legal proceedings. More information on potential factors that could affect the Company's financial results is included from time to time in the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of the Company's public reports filed with the SEC, including the Company's Form 10-K for the fiscal year ended September 28, 2013, its Form 10-Q for the quarter ended December 28, 2013, its Form 10-Q for the quarter ended March 29, 2014, its Form 10-Q for the quarter ended June 28, 2014, and its Form 10-K for the fiscal year ended September 27, 2014 to be filed with the SEC. The Company assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates.

Apple designs Macs, the best personal computers in the world, along with OS X, iLife, iWork and professional software. Apple leads the digital music revolution with its iPods and iTunes online store. Apple has reinvented the mobile phone with its revolutionary iPhone and App Store, and is defining the future of mobile media and computing devices with iPad.

source: Apple

 
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About the author

Luke Jones
Luke Jones is the Managing Editor at MobileBurn.com and is the person you need to speak to about the content on the site. Luke studied creative writing at degree level before carving out a reputation as a freelance tech writer. He settled here at MobileBurn, where he reviews devices and contributes to the news, as well as overseeing the site's content and direction.

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