Apple Reports Third Quarter Results

17 Million iPads Sold

Board Declares Quarterly Dividend of $2.65 per Common Share

CUPERTINO, Calif.--()--Apple® today announced financial results for its fiscal 2012 third quarter ended June 30, 2012. The Company posted quarterly revenue of $35.0 billion and quarterly net profit of $8.8 billion, or $9.32 per diluted share. These results compare to revenue of $28.6 billion and net profit of $7.3 billion, or $7.79 per diluted share, in the year-ago quarter. Gross margin was 42.8 percent compared to 41.7 percent in the year-ago quarter. International sales accounted for 62 percent of the quarter’s revenue.

The Company sold 26.0 million iPhones in the quarter, representing 28 percent unit growth over the year-ago quarter. Apple sold 17.0 million iPads during the quarter, an 84 percent unit increase over the year-ago quarter. The Company sold 4.0 million Macs during the quarter, a two percent unit increase over the year-ago quarter. Apple sold 6.8 million iPods, a 10 percent unit decline from the year-ago quarter.

Apple’s Board of Directors has declared a cash dividend of $2.65 per share of the Company’s common stock. The dividend is payable on August 16, 2012, to stockholders of record as of the close of business on August 13, 2012.

“We’re thrilled with record sales of 17 million iPads in the June quarter,” said Tim Cook, Apple’s CEO. “We’ve also just updated the entire MacBook line, will release Mountain Lion tomorrow and will be launching iOS 6 this Fall. We are also really looking forward to the amazing new products we’ve got in the pipeline.”

“We’re continuing to invest in the growth of our business and are pleased to be declaring a dividend of $2.65 per share today,” said Peter Oppenheimer, Apple’s CFO. “Looking ahead to the fourth fiscal quarter, we expect revenue of about $34 billion and diluted earnings per share of about $7.65.”

Apple will provide live streaming of its Q3 2012 financial results conference call beginning at 2:00 p.m. PDT on July 24, 2012 at www.apple.com/quicktime/qtv/earningsq312. 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 diluted 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, its Forms 10-Q for the fiscal quarters ended December 31, 2011 and March 31, 2012, and its Form 10-Q for the quarter ended June 30, 2012 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 Nine Months Ended
June 30, 2012   June 25, 2011 June 30, 2012   June 25, 2011
 
Net sales $ 35,023 $ 28,571 $ 120,542 $ 79,979
Cost of sales (1) 20,029 16,649 66,281 47,541
 
Gross margin 14,994 11,922 54,261 32,438
 
Operating expenses:
Research and development (1) 876 628 2,475 1,784
Selling, general and administrative (1) 2,545 1,915 7,489 5,574
 
Total operating expenses 3,421 2,543 9,964 7,358
 
Operating income 11,573 9,379 44,297 25,080
 
Other income and expense 288 172 573 334
 
Income before provision for income taxes 11,861 9,551 44,870 25,414
 
Provision for income taxes 3,037 2,243 11,360 6,115
 
Net income $ 8,824 $ 7,308 $ 33,510 $ 19,299
 
Earnings per common share:
Basic $ 9.42 $ 7.89 $ 35.89 $ 20.91
Diluted $ 9.32 $ 7.79 $ 35.48 $ 20.63
 
Shares used in computing earnings per share:
Basic 936,596 926,108 933,672 922,917
Diluted 947,059 937,810 944,440 935,688
 
(1) Includes stock-based compensation expense as follows:
Cost of sales $ 70 $ 52 $ 196 $ 155
Research and development $ 172 $ 119 $ 500 $ 336
Selling, general and administrative $ 206 $ 113 $ 596 $ 379
 

Apple Inc.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

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

 

June 30, 2012

September 24, 2011

 
ASSETS:
 
Current assets:
Cash and cash equivalents $ 7,945 $ 9,815
Short-term marketable securities 19,709 16,137
Accounts receivable, less allowances of $94 and $53, respectively 7,657 5,369
Inventories 1,122 776
Deferred tax assets 2,309 2,014
Vendor non-trade receivables 6,641 6,348
Other current assets 6,560 4,529
Total current assets 51,943 44,988
 
Long-term marketable securities 89,567 55,618
Property, plant and equipment, net 10,487 7,777
Goodwill 1,132 896
Acquired intangible assets, net 4,329 3,536
Other assets 5,438 3,556
Total assets $ 162,896 $ 116,371
 
 
LIABILITIES AND SHAREHOLDERS’ EQUITY:
 
Current liabilities:
Accounts payable $ 16,808 $ 14,632
Accrued expenses 10,430 9,247
Deferred revenue 5,822 4,091
Total current liabilities 33,060 27,970
 
Deferred revenue – non-current 2,530 1,686
Other non-current liabilities 15,560 10,100
Total liabilities 51,150 39,756
 
Commitments and contingencies
 
Shareholders' equity:
Common stock, no par value; 1,800,000 shares authorized; 937,266 and 929,277 shares issued and outstanding, respectively 15,573 13,331
Retained earnings 95,641 62,841
Accumulated other comprehensive income 532 443
Total shareholders' equity 111,746 76,615
 

Total liabilities and shareholders' equity

$ 162,896

 

$ 116,371
 

Apple Inc.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

 
Nine Months Ended
June 30, 2012   June 25, 2011
 
Cash and cash equivalents, beginning of the period $ 9,815 $ 11,261
 
Operating activities:
Net income 33,510 19,299
Adjustments to reconcile net income to cash generated by operating activities:
Depreciation, amortization and accretion 2,296 1,271
Share-based compensation expense 1,292 870
Deferred income tax expense 4,066 2,232
Changes in operating assets and liabilities:
Accounts receivable, net (2,278) (592)
Inventories (346) 162
Vendor non-trade receivables (293) (955)
Other current and non-current assets (3,238) (1,551)
Accounts payable 2,450 2,480
Deferred revenue 2,575 1,276
Other current and non-current liabilities 1,686 2,608
 
Cash generated by operating activities 41,720 27,100
 
Investing activities:
Purchases of marketable securities (121,091) (75,133)
Proceeds from maturities of marketable securities 10,344 16,396
Proceeds from sales of marketable securities 73,140 34,301
Payments made in connection with business acquisitions, net of cash acquired (350) 0
Payments for acquisition of property, plant and equipment (4,834) (2,615)
Payments for acquisition of intangible assets (1,067) (266)
Other (56) 34

 

Cash used in investing activities (43,914) (27,283)
 
Financing activities:
Proceeds from issuance of common stock 433 577
Excess tax benefits from equity awards 1,036 915
Taxes paid related to net share settlement of equity awards (1,145) (479)
 
Cash generated by financing activities 324 1,013
 
(Decrease)/increase in cash and cash equivalents (1,870) 830
 
Cash and cash equivalents, end of the period $ 7,945 $ 12,091
 
Supplemental cash flow disclosure:
Cash paid for income taxes, net $ 5,901 $ 2,563
 
                     
Apple Inc.
Q3 2012 Unaudited Summary Data
(Units in thousands, Revenue in millions)
 
     
Q2 2012 Q3 2011 Q3 2012
Sequential Change Year/Year Change
Operating Segments Mac Units Revenue Mac Units Revenue Mac Units Revenue Mac Units Revenue Mac Units Revenue
Americas 1,214 $ 13,182 1,487 $ 10,126 1,522 $ 12,806 25% - 3% 2% 26%
Europe 1,048 8,807 922 7,098 941 8,237 - 10% - 6% 2% 16%
Japan 158 2,645 150 1,510 173 2,009 9% - 24% 15% 33%
Asia Pacific 771 10,153 620 6,332 593 7,887 - 23% - 22% - 4% 25%
Retail 826     4,399 768     3,505 791     4,084 - 4% - 7% 3% 17%
Total Operating Segments 4,017 $ 39,186 3,947 $ 28,571 4,020   $ 35,023 0% - 11% 2% 23%
 
 
 
     
Sequential Change Year/Year Change
Product Summary Units Revenue Units Revenue Units Revenue Units Revenue Units Revenue
Mac Desktops (1)(9) 1,199 $ 1,563 1,155 $ 1,580 1,010 $ 1,287 - 16% - 18% - 13% - 19%
Mac Portables (2)(9) 2,818     3,510 2,792     3,525 3,010     3,646 7% 4% 8% 3%
Subtotal Mac 4,017 5,073 3,947 5,105 4,020 4,933 0% - 3% 2% - 3%
iPod (3)(9) 7,673 1,207 7,535 1,325 6,751 1,060 - 12% - 12% - 10% - 20%
Other Music Related Products and Services (4) 2,151 1,571 2,060 - 4% 31%
iPhone and Related Products and Services (5)(9) 35,064 22,690 20,338 13,311 26,028 16,245 - 26% - 28% 28% 22%
iPad and Related Products and Services (6)(9) 11,798 6,590 9,246 6,046 17,042 9,171 44% 39% 84% 52%
Peripherals and Other Hardware (7) 643 517 663 3% 28%
Software, Service and Other Sales (8)       832       696       891 7% 28%
Total Apple $ 39,186 $ 28,571     $ 35,023 - 11% 23%
 
 
 
(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