Apple Beats Estimates for Earnings & Revenue - Phones Beat, iPads Miss [UPDATE]

| Apple Stock Watch

$AAPLApple announced earnings for the June quarter (Apple's fiscal Q3) of US$6.9 billion on revenue of $35.3 billion. Apple's earnings per share (EPS) of $7.47 beat consensus estimates of $7.30 per share, while revenue beat estimates of $35 billion.

Both beats are good and come at the high end of Apple's guidance, but the company's revenue was effectively flat year-over-year, while earnings were markedly lower. Apple reported earnings of 8.8 billion in Q3 2012 (EPS of $9.32) on revenue of $35 billion.

"We are especially proud of our record June quarter iPhone sales of over 31 million and the strong growth in revenue from iTunes, Software and Services," Apple CEO Tim Cook said in a statement. "We are really excited about the upcoming releases of iOS 7 and OS X Mavericks, and we are laser-focused and working hard on some amazing new products that we will introduce in the fall and across 2014."

Apple CFO Peter Oppenheimer added, "We generated $7.8 billion in cash flow from operations during the quarter and are pleased to have returned $18.8 billion in cash to shareholders through dividends and share repurchases."

Apple reported gross margins of 36.9 percent. This also beat estimates of 36.6 percent, and were also way off of last year's gross margins of 42.8 percent—this is why earnings were down, too.

Apple sold 31.2 million iPhones, a June quarter record for Apple. That's not bad for a platform that many critics keep insisting is dying despite all evidence to the contrary. Apple sold 26 million iPhones in the year-ago quarter, and analysts had only been expecting 26.6 million iPhones.

The company sold just 14.6 million iPads. That's down from the year ago quarter of 17 million iPads, and it's down from consensus estimates of 17.6 million iPads.

Apple sold 3.8 million Macs, down from 4 million year-over-year. Context is king, because the PC industry as a whole dipped far more than Apple's 0.5% decline during the quarter, meaning that Apple continued to gain share in this market. Analysts had been expecting sales of 3.8 million Macs.

Apple provided guidance of between $34 billion and $37 billion for revenue, with gross margins between 36 and 37 percent. The company is expecting operating expenses (opex) between $3.9 billion and $3.95 billion, with other income of $200 million and a tax rate of 26.5 percent.

$AAPL leaped in after hours trading. As of this writing, shares were trading at $439.51, a gain of 20.52 (+4.90 percent). Apple's conference call could well change that—it begins at 2:00 PM PDT (5:00 PM EDT).

*In the interest of full disclosure, the author holds a tiny, almost insignificant share in AAPL stock that was not an influence in the creation of this article.

Comments

jbruni

Not to mention another round of $3.05/shr dividend.

geoduck

Interesting bit from the Q&A
2:21 pm Q: New products will ship this fall and gross margins do come down in product transition quarter. Talk about why this product cycle might be different?
2:21 pm A: Gross margin will be between 36 and 36%, same as June quarter. Sequentially, GM will be largely flat to slightly down. On track to have a very busy fall, I’d like to leave it there and go into more detail in October.
So I guess we have a better idea of when the next big product release will be: October. So much about the speculation I’ve been reading for a September release of some products and the November for others.

Lancashire-Witch

I assumed ‘October’ was a reference to the next Earnings Announcement; but I could be wrong.

geoduck

Hadn’t thought of that. Might be.

skipaq

Just think for a moment about what major event for Apple took place in October. Also remember what product category is connected to that event. You may even speculate about the day for such a release.

jbruni

I’m surprised that after hours trading is up. Usually after a record quarter AAPL crashes.

Lee Dronick

I’m surprised that after hours trading is up. Usually after a record quarter AAPL crashes.

Yes, hopefully it will stay up and indeed go higher.

RonMacGuy

I have to admit, I am a bit surprised that > 50% US smartphones activated at both AT&T and Verizon were iPhones this past quarter.  Not even a new iPhone model, but every other smartphone activated was an iPhone at the two largest US carriers last quarter.  If that doesn’t validate everything that Apple fans have been arguing for over the past 5 years here on TMO, then I really don’t know what would.  And I for one appreciate the peace and quiet here lately.

iJack

” If that doesn’t validate everything that Apple fans have been arguing for over the past 5 years here on TMO, then I really don’t know what would.  And I for one appreciate the peace and quiet”

Cue Bosc…..

RonMacGuy

Now iJack, I of course was not targeting any specific individual with my remarks.

wink

iJack

Read you 4 x 4, Ron. grin

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