Apple Reports First Quarter Results

Highest Quarterly Revenue and Earnings Ever

All-Time Record iPhone, iPad and Mac Sales

CUPERTINO, Calif.--()--Apple® today announced financial results for its fiscal 2012 first quarter which spanned 14 weeks and ended December 31, 2011. The Company posted record quarterly revenue of $46.33 billion and record quarterly net profit of $13.06 billion, or $13.87 per diluted share. These results compare to revenue of $26.74 billion and net quarterly profit of $6 billion, or $6.43 per diluted share, in the year-ago quarter. Gross margin was 44.7 percent compared to 38.5 percent in the year-ago quarter. International sales accounted for 58 percent of the quarter’s revenue.

The Company sold 37.04 million iPhones in the quarter, representing 128 percent unit growth over the year-ago quarter. Apple sold 15.43 million iPads during the quarter, a 111 percent unit increase over the year-ago quarter. The Company sold 5.2 million Macs during the quarter, a 26 percent unit increase over the year-ago quarter. Apple sold 15.4 million iPods, a 21 percent unit decline from the year-ago quarter.

“We’re thrilled with our outstanding results and record-breaking sales of iPhones, iPads and Macs,” said Tim Cook, Apple’s CEO. “Apple’s momentum is incredibly strong, and we have some amazing new products in the pipeline.”

“We are very happy to have generated over $17.5 billion in cash flow from operations during the December quarter,” said Peter Oppenheimer, Apple’s CFO. “Looking ahead to the second fiscal quarter of 2012, which will span 13 weeks, we expect revenue of about $32.5 billion and we expect diluted earnings per share of about $8.50.”

Apple will provide live streaming of its Q1 2012 financial results conference call beginning at 2:00 p.m. PST on January 24, 2012 at www.apple.com/quicktime/qtv/earningsq112. This webcast will also be available for replay for approximately two weeks thereafter.

This press release contains forward-looking statements including without limitation those about the Company’s estimated revenue and earnings per share. These statements involve risks and uncertainties, and actual results may differ. Risks and uncertainties include without limitation the effect of competitive and economic factors, and the Company’s reaction to those factors, on consumer and business buying decisions with respect to the Company’s products; continued competitive pressures in the marketplace; the ability of the Company to deliver to the marketplace and stimulate customer demand for new programs, products, and technological innovations on a timely basis; the effect that product introductions and transitions, changes in product pricing or mix, and/or increases in component costs could have on the Company’s gross margin; the inventory risk associated with the Company’s need to order or commit to order product components in advance of customer orders; the continued availability on acceptable terms, or at all, of certain components and services essential to the Company’s business currently obtained by the Company from sole or limited sources; the effect that the Company’s dependency on manufacturing and logistics services provided by third parties may have on the quality, quantity or cost of products manufactured or services rendered; risks associated with the Company’s international operations; the Company’s reliance on third-party intellectual property and digital content; the potential impact of a finding that the Company has infringed on the intellectual property rights of others; the Company’s dependency on the performance of distributors, carriers and other resellers of the Company’s products; the effect that product and service quality problems could have on the Company’s sales and operating profits; the continued service and availability of key executives and employees; war, terrorism, public health issues, natural disasters, and other circumstances that could disrupt supply, delivery, or demand of products; and unfavorable results of other legal proceedings. More information on potential factors that could affect the Company’s financial results is included from time to time in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s public reports filed with the SEC, including the Company’s Form 10-K for the fiscal year ended September 24, 2011 and its Form 10-Q for the fiscal quarter ended December 31, 2011 to be filed with the SEC. The Company assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates.

Apple designs Macs, the best personal computers in the world, along with OS X, iLife, iWork and professional software. Apple leads the digital music revolution with its iPods and iTunes online store. Apple has reinvented the mobile phone with its revolutionary iPhone and App Store, and is defining the future of mobile media and computing devices with iPad.

NOTE TO EDITORS: For additional information visit Apple’s PR website (www.apple.com/pr), or call Apple’s Media Helpline at (408) 974-2042.

© 2012 Apple Inc. All rights reserved. Apple, the Apple logo, Mac, Mac OS and Macintosh are trademarks of Apple. Other company and product names may be trademarks of their respective owners.

Apple Inc.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except number of shares which are reflected in thousands and per share amounts)

 

Three Months Ended

December 31, 2011

 

December 25, 2010

 
Net sales $ 46,333 $ 26,741
Cost of sales (1) 25,630 16,443
 
Gross margin 20,703 10,298
 
Operating expenses:
Research and development (1) 758 575
Selling, general and administrative (1) 2,605 1,896
 
Total operating expenses 3,363 2,471
 
Operating income 17,340 7,827
 
Other income and expense 137 136
 
Income before provision for income taxes 17,477 7,963
 
Provision for income taxes 4,413 1,959
 
Net income $ 13,064

 

$ 6,004
 
Earnings per common share:
Basic $ 14.03 $ 6.53
Diluted $ 13.87 $ 6.43
 
Shares used in computing earnings per share:
Basic 931,041 919,294
Diluted 941,572 933,154
 
(1) Includes share-based compensation expense as follows:
Cost of sales $ 63 $ 52
Research and development $ 160 $ 113
Selling, general and administrative $ 197 $ 134
 

Apple Inc.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions, except number of shares which are reflected in thousands)

   

December 31, 2011

September 24, 2011

 
ASSETS:
 
Current assets:
Cash and cash equivalents $ 10,310 $ 9,815
Short-term marketable securities 19,846 16,137
Accounts receivable, less allowances of $78 and $53, respectively 8,930 5,369
Inventories 1,236 776
Deferred tax assets 1,937 2,014
Vendor non-trade receivables 7,554 6,348
Other current assets 4,958 4,529
Total current assets 54,771 44,988
 
Long-term marketable securities 67,445 55,618
Property, plant and equipment, net 7,816 7,777
Goodwill 896 896
Acquired intangible assets, net 3,472 3,536
Other assets 4,281 3,556
Total assets $ 138,681 $ 116,371
 
 
LIABILITIES AND SHAREHOLDERS’ EQUITY:
 
Current liabilities:
Accounts payable $ 18,221 $ 14,632
Accrued expenses 11,500 9,247
Deferred revenue 4,886 4,091
Total current liabilities 34,607 27,970
 
Deferred revenue – non-current 2,187 1,686
Other non-current liabilities 11,833 10,100
Total liabilities 48,627 39,756
 
Commitments and contingencies
 
Shareholders' equity:
Common stock, no par value; 1,800,000 shares authorized; 932,214 and 929,277 shares issued and outstanding, respectively 13,961 13,331
Retained earnings 75,709 62,841
Accumulated other comprehensive income 384 443
Total shareholders' equity 90,054 76,615
 
Total liabilities and shareholders' equity

 

$ 138,681

 

$ 116,371
 

Apple Inc.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

 

Three Months Ended

December 31, 2011   December 25, 2010
 
Cash and cash equivalents, beginning of the period $ 9,815   $ 11,261  
 
Operating activities:
Net income 13,064 6,004
Adjustments to reconcile net income to cash generated by operating activities:
Depreciation, amortization and accretion 721 356
Share-based compensation expense 420 299
Deferred income tax expense 1,456 823
Changes in operating assets and liabilities:
Accounts receivable, net (3,561 ) (517 )
Inventories (460 ) 166
Vendor non-trade receivables (1,206 ) (433 )
Other current and non-current assets (962 ) (558 )
Accounts payable 4,314 2,346
Deferred revenue 1,296 634
Other current and non-current liabilities 2,472   653  
 
Cash generated by operating activities 17,554   9,773  
 
Investing activities:
Purchases of marketable securities (40,175 ) (19,575 )
Proceeds from maturities of marketable securities 3,038 3,279
Proceeds from sales of marketable securities 21,472 6,853
Payments for acquisition of property, plant and equipment (1,321 ) (1,214 )
Payments for acquisition of intangible assets (108 ) (49 )
Other (34 ) (23 )
 
Cash used in investing activities (17,128 ) (10,729 )
 
Financing activities:
Proceeds from issuance of common stock 91 208
Excess tax benefits from equity awards 333 454
Taxes paid related to net share settlement of equity awards (355 ) (233 )
 
Cash generated by financing activities 69   429  
 
Increase/(decrease) in cash and cash equivalents 495   (527 )
 
Cash and cash equivalents, end of the period $ 10,310   $ 10,734  
 
Supplemental cash flow disclosure:
Cash paid for income taxes, net $ 1,474 $ 826
 
Apple Inc.
Q1 2012 Unaudited Summary Data
(Units in thousands, Revenue in millions)
                     
Q4 2011 Q1 2011 Q1 2012
 

Sequential Change

Year/Year Change
Operating Segments

Mac

Units

Revenue

Mac

Units

Revenue

Mac

Units

Revenue Mac Units Revenue Mac Units Revenue
Americas 1,716 $ 9,648 1,360 $ 9,218 1,612 $ 17,714 - 6 % 84 % 19 % 92 %
Europe 1,176 7,397 1,245 7,256 1,482 11,256 26 % 52 % 19 % 55 %
Japan 175 1,111 162 1,433 184 3,550 5 % 220 % 14 % 148 %
Asia Pacific 731 6,530 516 4,987 814 7,697 11 % 18 % 58 % 54 %
Retail 1,096     3,584 851     3,847 1,106     6,116 1 % 71 % 30 % 59 %
Total Operating Segments 4,894 $ 28,270 4,134 $ 26,741 5,198 $ 46,333 6 % 64 % 26 % 73 %
 
 
Sequential Change Year/Year Change
Product Summary Units Revenue Units Revenue Units Revenue Units Revenue Units Revenue
Mac Desktops (1)(9) 1,278 $ 1,687 1,227 $ 1,731 1,479 $ 1,936 16 % 15 % 21 % 12 %
Mac Portables (2)(9) 3,616     4,585 2,907     3,699 3,719     4,662 3 % 2 % 28 % 26 %
Subtotal Mac 4,894 6,272 4,134 5,430 5,198 6,598 6 % 5 % 26 % 22 %
iPod (3)(9) 6,622 1,103 19,446 3,425 15,397 2,528 133 % 129 % - 21 % - 26 %
Other Music Related Products and Services (4) 1,678 1,431 2,027 21 % 42 %
iPhone and Related Products and Services (5)(9) 17,073 10,980 16,235 10,468 37,044 24,417 117 % 122 % 128 % 133 %
iPad and Related Products and Services (6)(9) 11,123 6,868 7,331 4,608 15,434 9,153 39 % 33 % 111 % 99 %
Peripherals and Other Hardware (7) 640 593 766 20 % 29 %
Software, Service and Other Sales (8)       729       786       844 16 % 7 %
Total Apple $ 28,270 $ 26,741     $ 46,333 64 % 73 %
 
(1) Includes revenue from iMac, Mac mini and Mac Pro sales.
(2) Includes revenue from MacBook, MacBook Air and MacBook Pro sales.
(3) Includes revenue from iPod sales.
(4) Includes revenue from sales from the iTunes Store, App Store, and iBookstore in addition to sales of iPod services and Apple-branded and third-party iPod accessories.
(5) Includes revenue from sales of iPhone, iPhone services, and Apple-branded and third-party iPhone accessories.
(6) Includes revenue from sales of iPad, iPad services, and Apple-branded and third-party iPad accessories.
(7) Includes revenue from sales of displays, networking products, and other hardware.
(8) Includes revenue from sales of Apple-branded and third-party Mac software, and services.
(9) Includes amortization of related revenue deferred for non-software services and embedded software upgrade rights.

Contacts

Apple
Steve Dowling, 408-974-1896 (Press)
dowling@apple.com
Nancy Paxton, 408-974-5420 (Investor Relations)
paxton1@apple.com
Joan Hoover, 408-974-4570 (Investor Relations)
hoover1@apple.com

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Contacts

Apple
Steve Dowling, 408-974-1896 (Press)
dowling@apple.com
Nancy Paxton, 408-974-5420 (Investor Relations)
paxton1@apple.com
Joan Hoover, 408-974-4570 (Investor Relations)
hoover1@apple.com