Apple’s Fiscal Quarter Earnings: Roundup and Indications

24 Jan

The fiscal 1Q earning results are in, and Apple, apparently, has only a few things to be confident or excited about. Revenue has increased from $46.33 billion USD during the same quarter of last year to a record 54.5 billion USD this year, which is about close to what the analysts from Wall Street had been expecting. Net quarter profit, likewise, showed positive—albeit slightly non-existent— growth, climbing from $13.06 billion USD last year to approximately $13.10 billion USD this year.

Among the notable highlights revealed this time are the market performances of the iPhone and iPad; Apple announced it had sold 47.8 million iPhone units, which is a significant increase from the 37 million units sold during the same period of last year. The sales of the iPad, similarly, improved from 15.4 million units a year ago to an impressive 22.9 million units this year. On the slightly less glamorous end, the iMacs’ first fiscal quarter sales ended at 4.1 million units, which is a tad lower than last year’s 5.2 million figure. As has been expected earlier, the iPod’s retail sales show equally disappointing results, declining from 15.4 million units last year to approximately 12.7 million units this year.

Beneath the façade of some of the “thrilling” numbers mentioned above, there are a few looming concerns that are worth thinking about. The iPhone sales, while impressive, are below the expectations of various analysts, some of whom expected the figures to be in the 50 million range. The arguably unpromising retail reception of the iPhone 5, along with what Apple CEO Tim Cook referred to as “constant [supply] constraints” –for both the iPhone 4 and 5— are among the likely culprits contributing to the not-as-expected iPhone momentum. Curiously, Apple happened to also be very low key about the number of iPad minis sold. Some have taken this to suggest that the Cupertino company’s 9.7-inch tablets may not be doing as well as its 7.9-inch miniature counterpart.

If there were a number that will perhaps haunt Apple and its investors, it would be the lackluster gross margins: the figure is revealed to be 38.6%, noticeably lower than the 44.7% figure from Q1 of the previous year.

Extra details to Ponder on

To add to all the above numbers and percentage figures, below are a number of noteworthy facts that have been revealed by Cook throughout the conference call:

  • On Rumors and Stock Prices: Cook took notable steps to warn against taking rumors seriously, particularly those that give a negative impression of how the company is doing. Investor confidence, as can be seen in Apple’s stock plunge following the news concerning the company’s 50% component part reduction, is easily swayed by uncertainty and questionable speculation. While Cook did not address any particular rumor, he mentioned that Apple’s supply chain is highly complex and suggested that one “data point” is insufficient to capture Apple’s performance. From the 10% stock price plunge observed after the earnings report, though, it appears investors aren’t really buying into that explanation.
  • Great Plans for China and other emerging markets: One of the significant numbers revealed during the earnings report was the fact that international growth accounted for 61% of the quarter’s revenue. A majority of these, no doubt, were because of the increased marketing efforts in China. It will be interesting to see whether China Mobile, the country’s largest mobile carrier, will finally decide to carry iPhones in 2013.