Apple Posts Record Q1 Revenue, but Guidance Sours After-Hours

Apple reported record revenue for the December quarter—the company's first fiscal quarter—of US$57.6 billion, up from $54.5 billion in the year ago quarter. Profits were $13.1 billion, flat year over year, but because Apple has has bought back millions of shares, earnings per share came in at $14.50—a record—up from $13.81 EPS a year ago.

Part of the flat profits on record revenue equation was because Apple's gross margins were down to 37.9 percent, compared to 38.6 percent in the year-ago quarter. Apple beat consensus EPS estimates of $14.09, but it wasn't enough for the after-hours market, which sent shares of $AAPL down $31.26 (-5.68 percent) to $519.24 per share.

On the negative side was Apple's guidance for the second quarter, which came in below consensus estimates. Apple said it would report between $42 billion and $44 billion in revenues, but analysts were expecting guidance of $46.1 billion. Apple also guided for gross margins between 37 percent and 38 percent, operating expenses of $200 million, and a tax rate of 26.2 percent.

In addition to record revenues, Apple also reported record iPhone sales of 51 million units, up from 47.8 million in the year ago quarter. The company moved 26 million iPads, too, a stunning number and a new record that was up from 22.9 million units a year ago.

Even more surprising was the 4.8 million Macs Apple sold during the quarter, up from 4.1 million in the year ago quarter. Apple's Mac sales increase took place during a quarter when the PC market shrank.

"We are really happy with our record iPhone and iPad sales, the strong performance of our Mac products and the continued growth of iTunes, Software and Services," Apple CEO Tim Cook said in a statement. "We love having the most satisfied, loyal and engaged customers, and are continuing to invest heavily in our future to make their experiences with our products and services even better."

"We generated $22.7 billion in cash flow from operations and returned an additional $7.7 billion in cash to shareholders through dividends and share repurchases during the December quarter, bringing cumulative payments under our capital return program to over $43 billion," Apple CFO Peter Oppenheimer said.

Apple ended the regular session at $550.50, up $4.43 (+0.81 percent), on heavy volume of 17.45 million shares trading hands.