Contrary to what you might think from scanning most of the headlines, Apple had a great Q4 (three months ending September 24 2011) with revenue up 40% to $28.27bn and net profit up 54% to 6.62bn. Despite that, its shares dipped by around 6% in after hours trading last night - because it failed to meet street expectations. This smacks more of over excitement than a rational response.
The reason for the excitement was that a mere(!) $17.01m iPhones were sold. This was a 21% yoy increase but down on the previous two quarters. However ‘the street’ had been expecting 20m. But there was a sound reason for lower than expected shipments– rumours of a new iPhone launch during the period dampened iPhone sales. When the new product was launched earlier this month (after Q4 had closed), 4m were sold in three days.
With a new iPhone out (even if it isn’t the iPhone 5) and the Christmas period underway, prospects for the new quarter look very strong and Apple has reflected that in its outlook for Q1 when it is forecasting revenue of about $37bn.
Other financial highlights include the sale of 11.12m iPads, a whopping 166% up on the year-ago quarter, taking the total to close to 40m, and confirming that this product is a major growth driver and tablet leader. However other product areas did well too - Mac sales were up 26% yoy. The only negative was that the number of iPods sold declined by 27% yoy, but this was not unexpected as consumers transition to the iTouch.
Our take on these results is that there are no signs that Apple is losing momentum. Its Q4 was impressive and Q1 looks even better now it has the iPhone 4S to take to market. Product releases and quarterly timeframes can’t always coincide.