VentureDNA | Apple: Historic Quarter
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Apple: Historic Quarter

18 Jan Apple: Historic Quarter

images1Apple has had a rough couple of days. Yesterday, CEO Steve Jobs announced a medical leave of absence. As a result, the stock plunged today before rallying back to close down just over 2 percent. But this should cheer everyone up. Apple has just announced their Q1 2011 (their holiday quarter) earnings — and as many anticipated, they’re massive.

How massive? Well, coming off its best quarter ever in terms of revenue ($20.34 billion in Q4), Apple was projecting $23 billion in revenue for the quarter. The Street, meanwhile, recognizing that Apple always lowballs these numbers, thought revenue would be more like $24.38 billion. The actual number? $26.74 billion.

Earnings per share had been pegged at $5.38 by the street (well ahead of Apple’s $4.80 estimate). The actual number there was $6.43. Net quarterly profit, meanwhile, was $6 billion — well above the record $4.3 billion Apple did last quarter.

In terms of actual products, Apple sold 16.24 million iPhones, a new record for the company. Perhaps more impressively, they sold 7.33 million iPads — over 3 million more than last quarter.

Apple also sold 4.13 million Macs and 19.45 million iPods during the quarter. The Mac sales were also a new record and were up 23 percent year-over-year (though a little below what some had been projecting). iPod sales, meanwhile, were down 7 percent year-over-year, continuing their decline.

Gross margins also continued their trend of being slightly off what they were in the year-ago period. This quarter they were 38.5 percent versus 40.9 percent a year ago. This likely has a lot to do with how well the iPad is selling — a device which Apple priced fairly low compared to their normal margins.

Jobs as quoted in the release on the numbers saying, “We had a phenomenal holiday quarter with record Mac, iPhone and iPad sales. We are firing on all cylinders and we’ve got some exciting things in the pipeline for this year including iPhone 4 on Verizon which customers can’t wait to get their hands on.”

Apple is projecting $22 billion and earnings per share of $4.90 for the upcoming quarter.

The earnings call will start in a few minutes. Follow along with my live notes below:

Peter Oppenheimer, Apple CFO:

• We sold more Macs, iPhones, and iPads than any quarter Apple’s history.

• Net income 6 billion, new record by $1.7 billion

• 4.13 million Macs. 23% growth over the year-ago. 8 times PC growth in the market.

• 50% in Asia and Japan. Growth fueled by demand for the new MacBook Air and the Pro.

• 3 to 4 weeks of Mac channel inventory

• Mac App Store – open Jan 6 – available in 90 countries. More than 1,000 free and paid apps. Very pleased with customer response. 1 million downloads in one day

• 19 million iPods (21 million a year ago). iPod touch grew 27% year over year.

• U.S. MP3 player market share is still over 70%

• 4 -6 weeks of iPod channel inventory

• $1.1 billion revenue for iTunes Store. Beatles are here.

• 16.2 million iPhones. 86% year over year growth. (70% growth from global smartphones overall)

• $10.47 billion from sales of iPhone and accessories.

• 185 carriers in 90 countries

• Asia and Japan are more than doubling year over year

• 3.5 million iPhones in channel inventory

• Verizon getting iPhone 4 for 93 million customers

• iPad sold 7.3 million units.

• In 46 countries now

• Over 80% of Fortune 100 are deploying or testing iPad

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