I was watching Bloomberg tonight in the run up to the Apple results announcement with the ‘pundits’ all forecasting their first profits reversal. The moment the release reported ‘record profits of $13.1b” in Q1, the subject was not mentioned again! But Apple managed that with the tiniest increase -profits were $13.078b compared with $13.064b in Q1 2012. Instead, they focused on the Q2 forecast revenues of ‘between $41b and $43b” which was ‘below expectations”. But Apple always forecasts low. Then iPhone sales didn't hit the magic 50m units. It was more than enough for the Bears to Win – writing Apple stock down another c10% in after-hours trading.
But the Q1 numbers would have been impressive for any company other than Apple. Revenues, at $54.5b, were up 18% yoy. ('Dismal' was how one analyst described this...) 47.8m iPhones were sold – up 30% yoy. Problem was that 50m+ was the expectation. 22.9m iPads – up 48% yoy. Apple gave the example of the Barclays deployment of 8,000 iPad as'the most successful IT deployment in Barclays' history'. Tim Cook said that they could have sold a lot more iPad minis and that the backlog was 'significant'. Tim Cook believes that the tablet market will be bigger than the PC market'at some point'. They even sold another 12.7m iPods – albeit down 18% yoy. c70% of the total MP3 market. iTunes revenues, at $3.69b, were up 22% yoy. 2b Apps were downloaded in December alone. 40b downloads to date and $7b paid to Apps developers. Mac revenues declined 17% to $5.5b. And that bit is really disappointing as it means that Mac sales are falling even faster than PC sales. Looks like tablets are now hitting Apple sales too!
$23b cash was generated in the quarter to c$137.1b - $94b 'offshore'. A $2.64 dividend per share will be paid in Feb 13..
There was no indication of any future 'game-changers' other than “We’re working on some incredible stuff, the pipeline’s chockfull”. But it looks like there was nothing in the announcement or the conference call to keep the bears at bay.