Apple today announced financial results for the first calendar quarter of 2013 and second fiscal quarter of 2013. For the quarter, Apple posted revenue of $43.6 billion and net quarterly profit of $9.5 billion, or $10.09 per diluted share, compared to revenue of $39.2 billion and net quarterly profit of $11.6 billion, or $12.30 per diluted share in the year-ago quarter.
Gross margin for the quarter was 37.5 percent compared to 47.4 percent in the year-ago quarter, with international sales accounting for 66 percent of revenue. Apple also declared a increased dividend payment of $3.05 per share, payable on May 16 to shareholders as of the close of trading on May 13. The company currently holds $145 billion in cash and marketable securities.
In addition to the increase in the dividend payment, Apple said it will dramatically increase its share repurchase authorization to $60 billion from $10 billion. The company says it expects to spend $100 billion in cash under its capital return program by the end of 2015. Apple is now paying $11 billion per year in dividends to shareholders.
Quarterly iPhone unit sales reached 37.4 million, compared to 35.1 million in the year-ago quarter, and the company sold 19.5 million iPads, up from 11.8 million in the year-ago quarter. Apple sold just under 4 million Macs compared to 4 million in the year-ago period.
“We are pleased to report record March quarter revenue thanks to continued strong performance of iPhone and iPad,” said Tim Cook, Apple’s CEO. “Our teams are hard at work on some amazing new hardware, software and services, and we are very excited about the products in our pipeline.”
Apple’s guidance for the third quarter of fiscal 2013 includes expected revenue of $33.5-35.5 billion and gross margin between 36 and 37 percent.
Apple will provide live streaming of its Q1 2013 financial results conference call at 2:00 PM Pacific, and MacRumors will update this story with coverage of the conference call highlights.
Apple’s stock price is trading up more than five percent after hours as the market reacts to the earnings news.
Conference Call Highlights
– „A lot of news to share with you today“ regarding March quarter and capital return program.
– Halfway through fiscal 2013 year, introduced and ramped production of unprecedented number of new products.
– Revenue was more than $98 billion, net income more than $22 billion.
– 85 million iPhones, 42 million iPads. Unimaginable to us a few years ago.
– Beat our guidance but didn’t meet everyone’s expectations.
– Achieved incredible scale and financial success. Margins have decreased and growth has slowed.
– Revenues grew $13 billion in first half of the year. Average weekly growth slowed to 19%. Gross margins closer to levels from a few years ago.
– Year over year comparisons difficult because of incredible 2012.
– iPad Mini pushed margins down.
– Guiding to same revenue but decline in margins.
– Decline in stock price has been frustrating, but Apple remains strong and we will continue to do what we do best. Can’t control exchange rates and world economies and certain cost pressures.
– Most important objective is to create innovative products.
– Continue to focus on the long term, remain very optimistic in our future.
– Participating in large and growing markets, see lots of promise in front of us.
– Great ecosystem.
– Potential of exciting new product categories.
– Smartphone market will double between 2012 and 2016, to 1.4 billion units annually. Tablets growing even faster.
– Amazing new hardware, software and services coming this fall and throughout 2014.
– Strongest ecosystem in the industry.
– Highest loyalty and customer satisfaction rates in the industry.
– Focus on the world’s best products that change people’s lives.
– Same company that brought the iPhone and iPad, and have a lot more surprises in the works.
– Returned $10 billion under share repurchase and dividend payments.
– Continue to generate cash in excess of our needs.
– Firmly committed to attractive returns to shareholders through business growth and return of capital.
– Return $100 billion by the end of calendar 2015.
– Concluded that investing in Apple was the best option.
– Increasing dividend by 15%, will access the debt markets.
– Appreciate input from so many shareholders. Will evaluate yearly and will continue to invest in the business.
– Disciplined but will not underinvest.
– New March quarter records for iPhone and iPad sales, new record for iTunes sales.
– Strong growth in iPhone and iPad sales.
– 37.4 million iPhones sold, up from 35.1 million y/y. 7% growth. 11.6 million in channel inventory, up 1 million sequentially. In target range of 4-6 weeks of inventory. #1 spot in U.S. smartphone market for 3-months ending in February. iPhone number 1 in Japan for all of calendar 2012 and Q4 2012. First time a non-Japanese company has achieved the number one spot for an entire year.
– IDC says iPhone is number 1 or 2 in smartphone sales in half the countries IDC tracks.
– 95% loyalty rate among iPhone owners, „substantially higher“ than the competition. JD Power ranks iPhone top for 9 years in a row.
– 30,000 companies distributing iOS apps for their employees. Cisco BYOD increased iPhones connecting to its network by 50%.
– 19.5 million iPads versus 11.8 million y/y. Very strong growth in every operating segment, sales more than doubled in Greater China and Japan. iPad and iPad mini are extremely popular. Significantly more iPad minis sold this quarter. Overwhelming majority of iPad mini purchasers are first time iPad customers.
– iPad mini is now in target range of 4-6 weeks of iPad channel inventory.
– 96% of iPad customers are satisfied with their tablets.
– Delighted by the number of companies using iPad, plus adoption of iPad in emerging countries.
– Just under 4 million Macs. 2% down y/y. Global computer market contracted 14% y/y. Decline in portable sales, increase in iMac sales.
– 4-5 weeks of Mac channel inventory.
– 5.6 million iPods, iPod Touch accounts for more than half of iPods sold. iPod share of US market of MP3 players was more than 70% of market.
– Apple ecosystem continues to grow and thrive.
– Very important driver of customer satisfaction and retention.
– Sunday marks 10th anniversary of iTunes Music Store.
– Quarterly billings of $4 billion, a new record. $16 billion annual run rate. Largest digital content store in the world.
– Music stores in 119 countries, 35 million songs, movies in 109 countries, iBookstore in 155 countries. App Store in 155 countries, covering 90% of world’s population. 850,000 iOS apps, 350,000 apps for iPad.
– App downloads passed 45 billion, app devs have made $9 billion total.
– App Store accounted for 74% of all app sales worldwide in March quarter.
– App Store accounted for 95% of Backflip Studio’s annual $100 million in revenue.
– iOS platform offers secure environment.
– 97% of mobile malware on Android.
– iPad accounted for 82% of all North American tablet traffic in March.
– 800 apps downloaded per second in the quarter, y/y app revenue doubled.
– 300 million people using iCloud. Great new features and capabilities in the pipeline.
– $5.2 billion in retail, up 19%. Up because of iPhone and iPad sales. 402 stores, including 151 outside the US. Open 30 new stores in fiscal 2013, plus 20 store remodels. Average revenue per store $13.1 million vs $12.2 million y/y. 91 million visitors compared to 85 million y/y. 78,000 per store per week.
– $144.7 billion in cash plus short and long term marketable securities. Up $7.6 billion. $102 billion is offshore.
– $2.5 billion in dividends, concluded $1.95 billion accelerated share repurchase program. 4 million shares of Apple stock retired.
– Doubling return of capital program to $100 billion by end of 2015.
– Average of $30 billion per year.
– Dividends, share repurchases.
– Will access debt markets.
– $60 billion in share buyback, largest of any company in history. Repurchasing shares is attractive use of capital. Buy shares beginning this month. Continue to net share settle employee RSU’s. $1 billion of cash annually.
– Quarterly dividend to $3.05/share from $2.65, up 15%.
– Will review annually.
– Among the largest dividend payments in the world, roughly $11 billion per year.
– Will access U.S. debt ratings over time. Generating significant cash offshore, repatriating cash would cause significant tax consequences.
– Access to attractively priced capital, efficient leverage of our balance sheet.
– Will maintain domestic liquidity.