Apple had a blowout quarter and an equally impressive earnings call with Steve Jobs. Quite Impressive.
Apple Reports Fourth Quarter Results
Apple® today announced financial results for its fiscal 2010 fourth quarter ended September 25, 2010. The Company posted record revenue of $20.34 billion and net quarterly profit of $4.31 billion, or $4.64 per diluted share. These results compare to revenue of $12.21 billion and net quarterly profit of $2.53 billion, or $2.77 per diluted share, in the year-ago quarter. Gross margin was 36.9 percent compared to 41.8 percent in the year-ago quarter. International sales accounted for 57 percent of the quarter’s revenue.
Apple sold 3.89 million Macs during the quarter, a 27 percent unit increase over the year-ago quarter. The Company sold 14.1 million iPhones in the quarter, representing 91 percent unit growth over the year-ago quarter. Apple sold 9.05 million iPods during the quarter, representing an 11 percent unit decline from the year-ago quarter. The Company also sold 4.19 million iPads during the quarter.
“We are blown away to report over $20 billion in revenue and over $4 billion in after-tax earnings—both all-time records for Apple,” said Steve Jobs, Apple’s CEO. “iPhone sales of 14.1 million were up 91 percent year-over-year, handily beating the 12.1 million phones RIM sold in their most recent quarter. We still have a few surprises left for the remainder of this calendar year.”
“We’re thrilled with the performance and strength of our business, generating almost $5.7 billion in cash flow from operations during the quarter,” said Peter Oppenheimer, Apple’s CFO. “Looking ahead to the first fiscal quarter of 2011, we expect revenue of about $23 billion and we expect diluted earnings per share of about $4.80.”
The best part was Steve’s rant against RIM and Google, part of which you can hear here.
After having a stellar quarter, shares fell about 6 percent in after-hours trading. Reason, drop in margins.
Apple’s profit margins are the envy of the consumer electronics industry. The problem was that the company’s newest products were not as profitable as its computers and iPod music players. Strong sales of lower-margin products — the iPad among them — caused the decline, according to Apple executives.
The company said gross margins fell to 36.9 percent, from 41.8 percent in the quarter a year ago. Apple predicted that its margins would slump a bit more, to 36 percent, in the current quarter. Executives repeatedly played down the importance in a conference call with analysts by saying that they were happy with where they were.