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Apple's numbers fall mostly in line with its own forecasts, analyst numbers

Another quarter is in the books, and Apple is once again rolling in cash. Apple generated revenue of $37.4 billion for fiscal Q3 and earnings of $1.28 per share. This translated into a record Q3 when it comes to profits, with the company raking in $7.7 billion. Analysts were expecting revenue of $37.99 billion and EPS of $1.23.
Apple issued guidance of $36 to $38 billion for the quarter, so these numbers are right in line with expectations.

Gross margins also ticked up compared to last year, rising from 36.9 percent to 39.4 percent. To go along with that info, Apple reported during its earnings call that the average selling price (ASP) for its Mac, iPod, iPhone, and iPad product lines were $1,255, $151, $561, and $444 respectively. The $444 figure for the iPad tells us that the iPad mini and iPad mini with Retina Display are accounting for the bulk of iPad sales.
“Our record June quarter revenue was fueled by strong sales of iPhone and Mac and the continued growth of revenue from the Apple ecosystem, driving our highest EPS growth rate in seven quarters,” said Apple CEO Tim Cook.

Apple CEO Tim Cook [Image Source: Fast Company]

“We are incredibly excited about the upcoming releases of iOS 8 and OS X Yosemite, as well as other new products and services that we can’t wait to introduce.”
During the quarter, Apple sold 13.3 million iPads, 35.2 million iPhones, and 4.4 million Macs. These compared to last year’s figures of 14.6 million, 31.2 million, and 3.8 million respectively.
iPad sales continue to be a sore point for Apple as we saw with the fiscal Q2 numbers. Apple has seen demand for its iPad weaken as newer, cheaper competition has entered the fray. In addition, the emergence of “phablet” devices have somewhat blunted the demand for tablet devices.
The iPhone numbers are up year-over-year, which is to be expected considering that Apple opened the floodgates to the Chinese market earlier this year. The iPhone numbers could have likely been even higher, but Apple fans are likely waiting for the larger screen iPhones (4.7” and 5.5”) to hit the market this fall.

Apple iPhone 6 render [Image Source: 9to5Mac]
Apple has already [internally] admitted that it has failed to deliver on bringing large-screen iPhones to its customers and it looks to right that wrong with the iPhone 6. So we’ll be looking forward to the fiscal Q4 numbers to see how iPhone sales stack up compared to last year.

Source: Apple

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That's a lotta dough
By Grimer21 on 7/22/2014 5:10:46 PM , Rating: 3
$7.7B in one quarter... dear god! I can't wait to see their numbers when iPhone 6 hits. It's going to be NUTS!

RE: That's a lotta dough
By Mint on 7/22/2014 5:37:43 PM , Rating: 1
It's actually the third lowest result since FQ1 2012. They've averaged ~$10B per quarter since then.

RE: That's a lotta dough
By Acupuncture on 7/22/2014 5:57:23 PM , Rating: 3
Their margins grew 3%, and they saw a 12.3% increase in revenue from Q2 2013, all without any new product categories. I'd say that's the sign of an incredibly healthy company, and Samsung is probably crapping themselves now.

RE: That's a lotta dough
By retrospooty on 7/22/2014 6:08:27 PM , Rating: 2
Saying Samsung is in trouble is as goofy as saying Apple is in trouble. Samsung just made a 7 billion profit last quarter as well... It just wasn't quite as much as they forecasted to make. This was due to overly optimistic forecasts and lack of attention to how good their competition is... Regardless, both companies are ridiculously profitable.

RE: That's a lotta dough
By Mint on 7/23/2014 12:14:53 AM , Rating: 2
Honestly, I wasn't trying to say Apple is in trouble. I should've read my post from a different POV before posting that.

RE: That's a lotta dough
By ilt24 on 7/23/2014 1:05:15 AM , Rating: 2
Samsung just made a 7 billion profit last quarter as well...
Samsung won't release earnings until July 31st, they provided a preview a couple of weeks ago in which they said their Operating Income was $7.1B, we have to wait a another week to know their Net Income. Today Apple said it's Operating Income for the quarter was $10.3B.

RE: That's a lotta dough
By retrospooty on 7/23/2014 1:59:41 PM , Rating: 2
Yes, it was a reduced forecast, they are now expecting $7.1 billion operating profit in the current quarter. Like I said, 7 billion profit = not hurting in any way.

"It expects to make an operating profit of 7.2 trillion won ($7.1bn) in the April-to-June period, down from 9.5 trillion won a year ago"

RE: That's a lotta dough
By ilt24 on 7/23/2014 6:44:08 PM , Rating: 2
My point is there is a difference between Operating Profit and Net Profit and you were comparing Samsung's Operating Profit to Apple's Net profit.

RE: That's a lotta dough
By Monkey's Uncle on 7/23/2014 8:42:48 PM , Rating: 1
And picking nits doesn't change the facts that Samsung is no more hurting than Apple is.

I would not call $7B operating or net profit 'hurting' in any way.

RE: That's a lotta dough
By retrospooty on 7/24/2014 8:33:46 AM , Rating: 2
Exactly... Just a few years ago before Samsung and Apple's consistent multi-billion dollar quarters, companies were jumping up and down to make a couple hundred million in a quarter. Now, both companies growth rate is slowing and we act like its a bad thing. They were both growing so insanely fast, they cant possibly keep growing at that pace. If they did, the entire planet would be owned by the 2 companies by 2025. They are both stabilizing at or near record profit levels... That's a win win.

RE: That's a lotta dough
By ilt24 on 7/24/2014 10:04:35 AM , Rating: 2
I would not call $7B operating or net profit 'hurting' in any way.

I not saying Samsung is in financial trouble, they are a very profitable company. I was just saying that his comparison was wrong and trying to say profits for the two companies were about the same is also wrong.

A valid comparison that can be made with the pre-release numbers from Samsung is:

__Revenue = $50.3B
__Operating Profit = $7.1B
__OP/R = 14.1

__Revenue = $37.4B
__Operating Profit = $10.3B
__OP/R = 27.5

RE: That's a lotta dough
By Shadowself on 7/22/2014 6:12:31 PM , Rating: 2
Wow. An interestingly negative way to say something that is meaningless.

Traditionally, Apple's FQ3 is its softest. This is the third FQ3 since FQ1 2012. Since this is the third lowest quarter since FQ1, that means that it is the best FQ3 with the other two (FQ3 2012 and FQ3 2013) being lower. AND, all the other quarters (non FQ3 quarters) are better than this one. So Apple's financials are getting better for the FQ3 periods and all the other quarters are even beating this one.

So, in reality, Apple's posting the best financials ever no matter how badly and negatively you want to spin it.

I just want to know why the iPad numbers are so soft for this past quarter. Are people migrating to other tablets? Are people waiting on the next generation? Are people buying Mac laptops (which went up significantly) instead of tablets (and the "post PC era" is not really here yet)? Are people realizing that the screen real estate on the iPad Air and the iPad mini is just not large enough to get real work done (and thus the IBM deal won't pan out like Apple would like)? Lots of questions that need to be answered just with respect to the iPad.

RE: That's a lotta dough
By Acupuncture on 7/22/2014 7:07:46 PM , Rating: 2
Tim Cook mentioned that iPad penetration for businesses is at a very low 20%. That's an area that Apple may seen incredible growth if their IBM join-effort works out.

RE: That's a lotta dough
By Mint on 7/23/2014 12:13:47 AM , Rating: 2
I'm sorry, I wasn't trying to say anything negative.

I was just pointing out that $7.7B isn't spectacular for them. It's like being wowed by LeBron scoring 20.

RE: That's a lotta dough
By robinthakur on 7/23/2014 4:04:16 AM , Rating: 2
I was musing about why iPad growth is slowing this morning and I personally haven't refreshed my iPad or iPad mini this year, but probably will this new season or I might try a Surface Pro 3 and see if it's improved. I find my current iPads good enough currently for what I use them for. I put the weak sales down to a very low profile ad campaign for iPads currently ("What will your verse be") which is far from punchy or memorable, as much as it is tasteful. I enjoyed the campaign but it wouldn't make me pull the trigger on a purchase. It is clearly aimed at the more well-healed parts of the market, as a lifestyle accessory rather than a tablet computer and I think this approach won't win them many additional sales as this particular market already buy iPads and Macs in droves. They would be better off doing something more comparative that shows off the gorgeous design in a punchy way. This is a great shame as the hardware is incredible for the iPad air and the mini retina, and seems like a bit of an oversight from Apple treating it like an end of line that they don't need to advertise as strongly, much like the Apple TV. By contrast the "Gigantic" and "You're more powerful than you think" campaign really helped move inventory of the 5S before the 6 hits, and the ads for the iPhone 5C are ubiquitous to say the least. I think they need to be a bit smarter in their ad spend, though obviously, they do make the most profit from iPhones and the halo effect of owning an iPhone is hopefully the purchase of other Apple products. To be fair, the extremely underwhelming Galaxy 5 launch has probably helped Apple more than anything else. I upgraded from an IP5 to a galaxy 5 and the galaxy 5 is infinitely less responsive for some reason I can't quite fathom.

AAPL Continues its dominance
By Acupuncture on 7/22/2014 5:26:40 PM , Rating: 1
I'm so glad I purchased stock 1 1/2 years ago. To think, it reached a record quarter without introducing any new product categories. If the iWatch is a big success, the next two years will explode for the company.

RE: AAPL Continues its dominance
By ritualm on 7/22/2014 8:27:00 PM , Rating: 2
If you used that same amount of money to buy BTC while it was trading at well under $10 3-4 years ago and sold them off early last year, you won't have to care about the price of Apple's stock anymore.

RE: AAPL Continues its dominance
By Acupuncture on 7/22/2014 9:22:51 PM , Rating: 1
Obviously you are not an investor. Bitcoin is one of the most volatile investments going, so looking back in hindsight is meaningless. AAPL was a screaming buy after the late 2012 crash, it was a complete no-brainer. Yet, sites like DT and their incredible investigative journalism parroted the same bullshit every other click-bait blog spewed out in that Apple was going under. Here we are today, the company is as healthy as ever, and yet to unleash new products to the masses. Meanwhile I'll probably take my winnings and use a large chunk of it to put down on a new house. Good times.

RE: AAPL Continues its dominance
By w8gaming on 7/22/2014 10:56:06 PM , Rating: 2
Well good for you. In fact you should be thankful that fear and doubt was targeted at Apple 1.5 years ago so you could easily bought Apple stock cheap and now got to cash in. If everyone was singing praise for Apple back then you would not even have this chance at all.

RE: AAPL Continues its dominance
By ritualm on 7/22/2014 11:44:18 PM , Rating: 3
Bitcoin is one of the most volatile investments going

Stocks are more volatile than BTC. All it takes to destroy all the "potential" earnings in your investments is a few well-timed events, some of them beyond a company's control - and right now we're getting a few of 'em: US national debt, Ukraine, Cold War 2.0, another regional war in the Mideast...

If you think AAPL is safer than most, I have a bridge in Alaska I'd love to sell you.

You know what's a better buy? Self-sufficiency, weapons, ammunition... not a company specializing in overpriced gadgetry. Your "winnings" are moot.

RE: AAPL Continues its dominance
By atechfan on 7/23/2014 9:20:15 AM , Rating: 3
Stocks can be volatile, but you are delusional if you think BitCoin is less so.

As far as the rest, emergency preparedness is a must, yes. But we still have to live in the now as well. Weapons and ammunition will not pay the bills. Stock market gains, on the other hand, will.

If you really want to be prepared for an economic collapse or any other sort of disaster, though, there are things more important than weapons. Land, for one. The urbans areas would become warzones way before rural areas. Get land and a house in the country. Learn to grow your own food. Make sure you can generate electricity.

But I feel you were not even wanting an actual discussion on disaster prep, but were instead making a knee-jerk anti-Apple response to the fact someone did well with Apple stock.

RE: AAPL Continues its dominance
By tayb on 7/23/2014 2:10:41 PM , Rating: 2
For individual stocks I actually agree. But that is high risk high reward investing. Most people are throwing their money into index funds and those are far less volatile than BTC.

RE: AAPL Continues its dominance
By Solandri on 7/23/2014 1:34:03 AM , Rating: 4
I'm so glad I purchased stock 1 1/2 years ago.

AAPL is up 47% from 18 months ago (2013-01-22).
The NASDAQ is up 41% in the same timeframe.
GOOG is up 49%.
MSFT is up 61%.

There's nothing special about Apple over the last 18 months. Pretty much the entire tech sector is up by about the same amount. Considering how lackluster the jobs and income recovery has been, it actually has me worried we're in a second tech bubble.

A tale of two bears
By tonyswash on 7/22/14, Rating: 0
RE: A tale of two bears
By w8gaming on 7/22/2014 11:19:49 PM , Rating: 2
Not sure what you mean, the market share of iOS is getting smaller compared to Android. This was what happened initially during PC vs Mac era. Apple went into a downward spiral later and started losing money. The mobile war had only begun for a few years it is way to early to celebrate Apple victory. You need to worry more about how Apple is going to spend the money to secure the future. The team up with IBM is a good start, but we yet to see anything tangible coming out of it.

RE: A tale of two bears
By tonyswash on 7/23/14, Rating: -1
RE: A tale of two bears
By Solandri on 7/23/2014 11:35:01 AM , Rating: 2
BTW that's actually not how it played out in the old PC market, Apple suffered from bozo management for a long time and as a result nearly went bust, that had nothing to do with market share.

Speaking as someone who actually owned an Apple II and was rooting for Apple during the original PC wars, that's not at all how things played out at all. The Apple II (and TRS-80, Commmodore 64, TI-99/4A, and Atari 400/800) were seen by most businesses as toys for geeks and kids to play with (a lot of games were involved), not real computers. Consequently they waited for IBM to come out with a business computer.

Which it did, with a vengeance. The original "killer app" for business PCs was the spreadsheet - Lotus 1-2-3. Despite the first spreadsheet being an Apple II app (Visicalc), the release of the IBM PC and Lotus 1-2-3 pretty much ended Visicalc, and the company was bought by Lotus a few years later.

Apple introduced Macintosh to compete. But instead of marketing it as a business tool, Apple touted its ease of use and simplicity. Consequently it picked up a big following among home users and tech-adverse businesses (artists and creative types). But it never really broke into the business market.

That's what relegated it to a 4% market share. The bad management didn't come until a decade later in the 1990s. To their credit, they stuck with Motorola processors through all this. I always felt they were much better CPUs than Intel's during the 1980s. But once the Pentium came out with a FPU integrated into all CPUs, Motorola was dust.

The minority Mac business, the one that 'lost' the PC wars, is now the healthiest PC OEM business on the planet

That's highly debatable. I can't even find numbers for Apple's PC market share because it's so small. Yes they're #3 in the U.S., but the U.S. is only about a quarter of the world's PC market, and Apple is lumped in the "others" category worldwide.

If you don't mean market share and instead some sort of profit per device figure, then by that definition I suspect gaming PCs like Alienware are "healthier" than Apple. It's just that their average profit numbers are dragged down because Dell (who owns Alienware) chooses to also make money off of lower-margin PCs. Which is why it doesn't really make sense to look at profit per device as a measure of health. Those lower-margin devices are still profitable. By selling the lower-margin devices, Dell is making more profit than if it sold only Alienware computers. Yet by your definition that means they're less healthy because selling the lower-margin devices lowers their average profit per device.

Also, the desktop Macs have been in decline for a decade. Their laptops are doing very well and have covered up this decline, but they're not really business machines. I help fix and buy computers for a lot of small businesses. I try to talk them into buying laptops because they're more flexible and can be used just like a desktop if you add a monitor, keyboard, and mouse; and if you add a SSD they're just as fast. But nearly all businesses still insist on a desktop for some inexplicable reason. (It's not for expansion as nearly none of them are ever upgraded beyond stock. The only tangible explanation I've been given is that they're harder and less attractive to steal.)

RE: A tale of two bears
By tonyswash on 7/23/14, Rating: 0
RE: A tale of two bears
By atechfan on 7/23/2014 9:03:47 PM , Rating: 2
You conveniently leave Microsoft's revenues and profits from the PC market out of the equation.

RE: A tale of two bears
By Cheesew1z69 on 7/23/2014 9:41:45 PM , Rating: 2
Does anyone honestly expect anything different from him at this point? I think it's a resounding no.

RE: A tale of two bears
By retrospooty on 7/23/2014 9:42:38 PM , Rating: 2
Tony doesn't do anything conveniently. It's a carefully calculated manipulation like most of his posts.

-just wyrmtongue things

RE: A tale of two bears
By glowingghoul on 7/23/2014 2:50:07 PM , Rating: 1
I love how Android fanbois equate a rising Android market share as the public making a judgment on the merits of the OS, instead of the fact that the cheapest, crappiest smartphones on the market run Android and sell in huge quantities.

There are lots of people who will automatically go for the zero dollar phone.

RE: A tale of two bears
By retrospooty on 7/23/2014 6:45:49 PM , Rating: 2
That is Android's strength not its weakness, it's flexible. It does run the cheapest crappiest phones. It also runs the best highest end most fully functional phones like G3, Xperia, HTC One, and everything in between. It also supports multiple resolutions and multiple chipsets and a wide variety of different hardware configurations to suit any needs. It also runs everything from tablets to smartwatched... It's also open, so you aren't stuck with whatever one OEM decides to give you. The low end is low, and it doesn't interest most people here, but the high end offers a far better experience, feature set and far better phones than IOS... That is why it's marketshare is large, flexibility.

Give me a break
By name99 on 7/22/2014 6:32:14 PM , Rating: 1
Apple has seen demand for its iPad weaken as newer, cheaper competition has entered the fray. In addition, the emergence of “phablet” devices have somewhat blunted the demand for tablet devices.

Do us all a favor and drop the attempts to "explain" the numbers.
You arguments are as silly as the standard "the Dow Jones rose today on expectations that continued hot weather will result in more ice cream sales".
If China caused more iPhone sales, why didn't it cause more iPad sales? How do phablets (a space Apple doesn't compete in) reduce demand for iPads?

Just give us the numbers and accept, like an adult, that some of these changes are just random and don't have pat "explanations".

RE: Give me a break
By w8gaming on 7/22/2014 11:05:48 PM , Rating: 2
Because there is no post-PC era. Tablets are not going to replace PC. iPad sales goes down while Mac sales has actually increased and it belongs to PC category not tablets. Tablets are a nice device for some usage patterns but it is not versatile enough to completely replace PC. Tablets sales number are going down because the market is saturated and switching into "replacement cycle" just like PC does. It has hit peak and apparently the numbers are smaller than PC sales, though very close to it.

RE: Give me a break
By jdre on 7/23/2014 8:06:13 AM , Rating: 2
"How do phablets (a space Apple doesn't compete in) reduce demand for iPads?"

I think you answer your own question in asking it.

People are realizing that the iPad is a consumption device, and isn't ergonomically or technologically suited to do any "real work." Try entering data into a spreadsheet on an iPad without throwing it out the window. Try grabbing a large, secure file from a coworker from their thumb drive.
"Phablets", or larger phones, make for a better mobile form factor for most quick consumption (i.e., reading blogs, emails, sharing photos and posting pics of food to instagram, watching shorter videos than a netflix binge) than the iPad, and people are going to light laptops or tablets designed specifically to be laptop hybrids to do actual work, or "create." I could never write a long document on an iPad.

The iPad is obsolete. I never understood its purpose. A larger phone for mobile experience, and a laptop or tablet/laptop hybrid are all a person needs.

"Spreading the rumors, it's very easy because the people who write about Apple want that story, and you can claim its credible because you spoke to someone at Apple." -- Investment guru Jim Cramer

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