Apple’s Fiscal Q4 Earnings: Key Takeaways

29 Oct

Apple’s fiscal fourth quarter earnings are in, and from a financial and sales standpoint, things appear to be slightly better than expected. Below are some of the most important highlights from the report:

Impressive earnings: Apple managed, once again, to defy expectations from Wall Street and various other analysts with an earnings per share of $8.26 USD (on $37.5 billion USD revenue) and a monstrous profit of $7.5 billion USD. Analysts were originally anticipating the fiscal Q4 revenues to be in the range of $36.82 billion USD and an earnings per share of $7.92 USD. The 37% gross margin, while impressive, fell short of the year-ago-quarter’s 40%.

Better-than-expected shipments: Shipments of all of Apple’s iPhones in Q3 were 33.8 million units, which is up 26% from 3Q12’s 26.5 million and slightly above what Wall Street had predicted (33.4 million units). The shipments of the iPads (14.1 million) and, surprisingly, Mac devices (4.6 million) also surpassed analyst expectations. The only noticeably disappointing results were from the iPod, whose shipment figures shrunk from 5.3 million units in 3Q12 to merely 3.49 million units this year.

Improved presence in Asia: To its benefit, Apple was able to increase revenues in Japan and China by a noticeable margin in the fiscal fourth quarter. This is in no small part due to the company’s increased marketing campaigns and attention towards the East Asian regions. With regard to China in particular, CEO Tim Cook is genearlly happy with what he sees, but still expects the company to “do better” in the future.

Furthering expansion: To spread Apple’s presence even further, Cook announced that the company would be opening 30 new retail stores throughout 2014, and suggested that two thirds of these would be outside the United States. The existing Apple retail stores have already managed to attract an average of  400 million visitors and  generated 4.5 billion USD in revenue in 3Q13 (a 6% increase compared to the same period a year ago).

New products and the future of Apple: When asked about new product categories and what to expect in the coming periods, Tim Cook had this to say: “If you look at the skills Apple has from hardware and software services…no one has skills like this…We obviously believe we can use our skills to build other great products in areas we do not participate in today.” Cook added, later on, that the promising 64-bit processors used in the new iPhones and iPads is just the “front end of a long road map.”

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