Apple Beat Microsoft in Revenue & Profit

| Apple Stock Watch

If you’re living in Hell, you may want to put a sweater on, as it’s likely to be getting colder by the second: Apple has now passed Microsoft in both revenue and earnings for the first time since Ronald Reagan was president. On Thursday, Microsoft announced revenue of US$16.43 billion and earnings of $5.23 billion for the March quarter, well behind Apple’s revenue of $24.67 billion and earnings of $5.99 billion.

Apple passed Microsoft on the revenue side in the September quarter of 2010, as you can see in the chart below. It took three more quarters for Apple to pass its erstwhile foe in profits, however, in part because of the disparate nature of the two companies’ business models.

Apple & Microsoft Revenue

Apple and Microsoft revenues in billions by calendar quarter since Q1 of 2009
Data compiled by The Mac Observer

The vast majority of Microsoft’s business is software, a business with very high gross margins, and therefore higher profit margins. Apple, on the other hand, is a hardware company, and while the Mac, iPhone, and iPad maker has far higher margins than any other PC maker on the planet, the company’s margins still don’t touch Microsoft’s.

In the March quarter, however, Apple was able to bring enough revenue to the table to overcome the gross margin difference and turn in higher profits than Big Redmond, which you can see in the chart below.

Apple & Microsoft Earnings

Apple and Microsoft earnings in billions by calendar quarter since Q1 of 2009
Data compiled by The Mac Observer

Apple & Microsoft revenue and earnings

A combined chart showing revenue and earnings (in billions) for Apple and Microsoft
Data compiled by The Mac Observer

For those keeping score at home, Apple passed Microsoft in terms of market cap (the value of a company as determined by the stock market) back in May of 2010. Today, Apple has a market cap of $320.7 billion, as compared to Microsoft’s $224.4 billion.

Oh well, at least Microsoft still sells more copies of Windows than Apple sales Macs. That’s something, right?

Shares in Microsoft ended the day higher at $26.71, up $0.330 (+1.25%), on heavy volume of more than 80 million shares trading hands.

AAPL ended the day lower at $346.75, down $3.40 (-0.97%), on light volume of 12.9 million shares.

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

Comments

Jamie

Wow. Who would have ever thought we’d see the day. Just, wow. smile

xmattingly

Winning!

http://www.youtube.com/watch?v=pipTwjwrQYQ

mhikl

Who would have ever thought . . .

Oh, I suspect Bosco had an inkling. He’s usually so well informed.

Ron might agree.

geoduck

Wow. Who would have ever thought we?d see the day.

I remember the dark days in 95-98. This is a sweet turn of events.
I’ve had this idea floating around in the back of my head for a few years now. Apple is accumulating all that cash to take over the smaller and (now) less profitable MS
LOL.

Engine Joe

Only problem, geo - at this point, why would Apple even want to own MS?  What does MS have that Apple would want?

Lee Dronick

Only problem, geo - at this point, why would Apple even want to own MS?? What does MS have that Apple would want?

Office, maybe.

I would rather see Apple buy Adobe and clean up Creative Suite.

Jamie

I remember the dark days in 95-98

Likewise, that was when I first started working with the Mac, a Performa (alas). wink If someone had told me back then that this news would happen one day, I would’ve thought they were crazy. It really is astonishing. smile

Neil Anderson

Impressive!

geoduck

at this point, why would Apple even want to own MS?

There’s no good business reason to.
But I’d love to listen in on the phone call. “Hello Bill? This is Steve. Guess what we just did…”

xmattingly

But I?d love to listen in on the phone call. ?Hello Bill? This is Steve. Guess what we just did??

I don’t see that phone call happening. But… if Apple wanted to, they could buy Dell outright and give the money back to their shareholders.

RonMacGuy

Wow, it’s amazing how Apple is doing so well.  You would think that the vacuum created by the mad rush of millions of angry people rushing from the walled garden would suck all of Apple’s profits away from them.  Yet Apple nearly doubles its revenue and profits from a year ago.

This is where Bosco runs and hides in his man-cave for a while and tries to understand what’s happening…

grin

calebcar

This chart says much more about Apple than it does about MSFT. Increasing earnings from $2.80 to $5.30 in a little over 2 years isn’t bad.
For a company Apple’s size to go from $1.50 to $6.40 is unearthly.

Not saying MSFT doesn’t have its problems but this graph does not speak badly for the company.

RonMacGuy

Not saying MSFT doesn?t have its problems but this graph does not speak badly for the company.

By all means, calebcar, MS is still doing very well.  No insult to MS intended on their performance…

Bill

would suck.

Yes, it would.

RonMacGuy

Yes, it would.

Wow, Bill, I have no clue what you were going for here.  Was it a very poor attempt at an insult?  Was it agreement with me?

Care to try again?

Bill

Wow, poor me?

Yes.

RonMacGuy

How old are you Bill?  12?

Bill

How old is?12?

12.

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