Apple Announces $43.6 Billion In Q2 2013 Revenues

Today Apple announced their earnings for Q2 2013.  Apple’s revenue for the quarter was $43.6 billion with earnings at $10.09 per share.  Apple’s profit for the quarter was $9.5 billion in profit.  Analysts were expecting $41.82 billion in revenue with earnings of $9.92 per share.  The profit report marks the first year-over-year drop in over 10 years at about 18%.

Apple sold a total of 37.4 million iPhones and 19.5 million iPads for the quarter.  They also sold slightly under 4 million Macs during the quarter and 5.6 million iPods.  The number of iPads sold are up from the 11.8 million mark one year ago.  iPhone sales were pretty plat from 35.1 million in the quarter one year ago.  Mac sales were pretty flat and iPod sales were down.

The gross margin was estimated at between 37.5% and 38.5%.  Apple reported about 37.5% compared to the quarter one year ago at 47.4%.  The reduction was due to lower margin items like the iPad Mini.  Apple generated $12.5 billion in cash flow from operations during the quarter with an ending cash balance of $145 billion.

“We are pleased to report record March quarter revenue thanks to continued strong performance of iPhone and iPad,” stated Apple CEO Tim Cook (emphasis added by Pulse2). “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.”  The new products will be announced this fall season.  There has been speculation that Apple is working on a smartwatch product.  In the biography of Apple co-founder Steve Jobs by Walter Isaacson, Jobs said that he has “cracked” the design of a television set.  Rumor has it that Apple has been struggling to create a final television set product due to issues with large media companies.

Apple’s estimates for Q3 is revenues at between $33.5 and $35.5 billion.  The gross margin estimates are between 36% and 37%.  And the operating expense estimates are between $3.85 billion and $3.95 billion.

Apple is going to be returning $55 billion in cash to shareholders to compensate for stock drops caused by a slowdown in growth.  Apple boosted their quarterly dividend and allocated more cash to buybacks.  The company announced plans to borrow funds for the largest share-repurchase program in history.  Apple will have returned $100 billion including past buybacks and dividends through 2012.

Apple CEO Tim Cook said that the company is going to be using more of the company’s cash and investments to reverse the slide that cut almost $280 billion in market cap that took place since September.  Apple raised their quarterly dividend 15% to $3.05 per share from $2.65.  They also boosted their share-repurchase program to $60 billion from $10 billion.

Cook faced pressure from some of Apple’s largest shareholders including hedge fund manager David Einhorn (Greenlight Capital) to return cash to shareholders.

The Apple iTunes store hit an all-time revenue high this quarter at $2.4 billion.  Apple CFO Peter Oppenheimer confirmed this figure during the quarterly earnings call.  He said that customers download over 800 apps every second, not all of them are paid though.  This means that over 69 million apps are downloaded every single day.  There are currently 850,000 apps and 350,000 of them are designed specifically for the iPad.

Apple said that they have seen 45 billion App Store downloads and paid out $9 billion to developers.  Around $4.5 billion was paid out in recent quarters.

In terms of Apple iCloud, the number of users on the service are 300 million.  This is up by around 50 million from the previous quarter.

This article was written by Amit Chowdhry. You can follow me at @amitchowdhry or on Google+ at
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