Saturday, January 26, 2013

AAPL 1QFY2013 Earnings

Apple reported earnings after the bell on January 23rd. Apple reported $54.5B in revenue compared to $46.3B in the year ago quarter and record quarterly net profit of $13.1B. Gross margins fell to 38.6 percent compared to 44.7 percent a year ago. Apple sold a record 47.8M iPhones in the quarter compared to 37M in the year-ago quarter and 23 million ipads. iPad sales were constrained due to supply falling short of demand for their new hand size tablet--the ipad mini. EPS came in at $13.81 compared to estimates of $13.47 down from $13.87 a year ago. 

While profits and earnings were flat from a year ago, one thing we feel the market isn’t taking into consideration is that last year Q4 had 7 more days then this year’s quarter. Taking that into account Apples revenues rose 25% while EPS rose 13.5% from the same quarter a year ago.  Apple sold 4.1 macs compared to 5.2 Mac in the year ago quarter. Mac sales were down reflecting IDC’s prediction of a 6% contraction in the personal computer market during the December quarter. 

A dividend of $2.65 was declared compared to no dividend a year ago. In addition, Apple is changing their approach of how they provide guidance to promote more transparency into their business. Previously guidance reflected a single point conservative estimate the company had reasonable confidence in achieving. Going forward they are providing a range of guidance that they believe they are likely to report within. The stock reacted negatively diving almost 13% to $450 from $514. For 2Q13’ revenue guidance is projected at 41- 43B and gross margin guidance estimated at 37.5% -38.5%. Apple has increased their product ecosystem and we remain excited for their product pipeline.

-Technology Analyst Ryan Stern 

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