Tuesday, July 24, 2012

Apple Reports Third Quarter Results - MarketWatch (press release)

CUPERTINO, Calif., Jul 24, 2012 (BUSINESS WIRE) -- --Board Declares Quarterly Dividend of $2.65 per Common Share

Apple(R) today announced financial results for its fiscal 2012 third quarter ended June 30, 2012. The Company posted quarterly revenue of $35.0 billion and quarterly net profit of $8.8 billion, or $9.32 per diluted share. These results compare to revenue of $28.6 billion and net profit of $7.3 billion, or $7.79 per diluted share, in the year-ago quarter. Gross margin was 42.8 percent compared to 41.7 percent in the year-ago quarter. International sales accounted for 62 percent of the quarter's revenue.

The Company sold 26.0 million iPhones in the quarter, representing 28 percent unit growth over the year-ago quarter. Apple sold 17.0 million iPads during the quarter, an 84 percent unit increase over the year-ago quarter. The Company sold 4.0 million Macs during the quarter, a two percent unit increase over the year-ago quarter. Apple sold 6.8 million iPods, a 10 percent unit decline from the year-ago quarter.

Apple's Board of Directors has declared a cash dividend of $2.65 per share of the Company's common stock. The dividend is payable on August 16, 2012, to stockholders of record as of the close of business on August 13, 2012.

"We're thrilled with record sales of 17 million iPads in the June quarter," said Tim Cook, Apple's CEO. "We've also just updated the entire MacBook line, will release Mountain Lion tomorrow and will be launching iOS 6 this Fall. We are also really looking forward to the amazing new products we've got in the pipeline."

"We're continuing to invest in the growth of our business and are pleased to be declaring a dividend of $2.65 per share today," said Peter Oppenheimer, Apple's CFO. "Looking ahead to the fourth fiscal quarter, we expect revenue of about $34 billion and diluted earnings per share of about $7.65."

Apple will provide live streaming of its Q3 2012 financial results conference call beginning at 2:00 p.m. PDT on July 24, 2012 at www.apple.com/quicktime/qtv/earningsq312 . This webcast will also be available for replay for approximately two weeks thereafter.

This press release contains forward-looking statements including without limitation those about the Company's estimated revenue and diluted earnings per share. These statements involve risks and uncertainties, and actual results may differ. Risks and uncertainties include without limitation the effect of competitive and economic factors, and the Company's reaction to those factors, on consumer and business buying decisions with respect to the Company's products; continued competitive pressures in the marketplace; the ability of the Company to deliver to the marketplace and stimulate customer demand for new programs, products, and technological innovations on a timely basis; the effect that product introductions and transitions, changes in product pricing or mix, and/or increases in component costs could have on the Company's gross margin; the inventory risk associated with the Company's need to order or commit to order product components in advance of customer orders; the continued availability on acceptable terms, or at all, of certain components and services essential to the Company's business currently obtained by the Company from sole or limited sources; the effect that the Company's dependency on manufacturing and logistics services provided by third parties may have on the quality, quantity or cost of products manufactured or services rendered; risks associated with the Company's international operations; the Company's reliance on third-party intellectual property and digital content; the potential impact of a finding that the Company has infringed on the intellectual property rights of others; the Company's dependency on the performance of distributors, carriers and other resellers of the Company's products; the effect that product and service quality problems could have on the Company's sales and operating profits; the continued service and availability of key executives and employees; war, terrorism, public health issues, natural disasters, and other circumstances that could disrupt supply, delivery, or demand of products; and unfavorable results of other legal proceedings. More information on potential factors that could affect the Company's financial results is included from time to time in the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of the Company's public reports filed with the SEC, including the Company's Form 10-K for the fiscal year ended September 24, 2011, its Forms 10-Q for the fiscal quarters ended December 31, 2011 and March 31, 2012, and its Form 10-Q for the quarter ended June 30, 2012 to be filed with the SEC. The Company assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates.

Apple designs Macs, the best personal computers in the world, along with OS X, iLife, iWork and professional software. Apple leads the digital music revolution with its iPods and iTunes online store. Apple has reinvented the mobile phone with its revolutionary iPhone and App Store, and is defining the future of mobile media and computing devices with iPad.

NOTE TO EDITORS: For additional information visit Apple's PR website ( www.apple.com/pr ), or call Apple's Media Helpline at (408) 974-2042.

(C) 2012 Apple Inc. All rights reserved. Apple, the Apple logo, Mac, Mac OS and Macintosh are trademarks of Apple. Other company and product names may be trademarks of their respective owners.

                                                                      Apple Inc.                                           UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS                                         (In millions, except number of shares which are reflected in                                                       thousands and per share amounts)                                                                           Three Months Ended               Nine Months Ended                                                                     ------------------------------- -------------------------------                                                                      June 30, 2012   June 25, 2011   June 30, 2012   June 25, 2011                                                                     --------------- --------------- --------------- ---------------          Net sales                                                       $  35,023       $  28,571       $ 120,542       $  79,979          Cost of sales (1)                                                  20,029          16,649          66,281          47,541                                                                            -------         -------         -------         -------            Gross margin                                                     14,994          11,922          54,261          32,438                                                                            -------         -------         -------         -------          Operating expenses:            Research and development (1)                                        876             628           2,475           1,784            Selling, general and administrative (1)                           2,545           1,915           7,489           5,574                                                                            -------         -------         -------         -------                         Total operating expenses                             3,421           2,543           9,964           7,358                                                                            -------         -------         -------         -------          Operating income                                                   11,573           9,379          44,297          25,080          Other income and expense                                              288             172             573             334                                                                            -------         -------         -------         -------          Income before provision for income taxes                           11,861           9,551          44,870          25,414          Provision for income taxes                                          3,037           2,243          11,360           6,115                                                                            -------         -------         -------         -------          Net income                                                      $   8,824       $   7,308       $  33,510       $  19,299                                                                            =======         =======         =======         =======          Earnings per common share:             Basic                                                        $    9.42       $    7.89       $   35.89       $   20.91             Diluted                                                      $    9.32       $    7.79       $   35.48       $   20.63          Shares used in computing earnings per share:             Basic                                                          936,596         926,108         933,672         922,917             Diluted                                                        947,059         937,810         944,440         935,688          (1) Includes stock-based compensation expense as follows:             Cost of sales                                                $      70       $      52       $     196       $     155             Research and development                                     $     172       $     119       $     500       $     336             Selling, general and administrative                          $     206       $     113       $     596       $     379                
                                                                   Apple Inc.                                             UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS                                      (In millions, except number of shares which are reflected in                                                               thousands)                                                                                      June 30, 2012       September 24, 2011                                                                                 --------------------   --------------------                                                                 ASSETS:          Current assets:            Cash and cash equivalents                                                     $      7,945           $      9,815            Short-term marketable securities                                                    19,709                 16,137            Accounts receivable, less allowances of $94 and $53, respectively                    7,657                  5,369            Inventories                                                                          1,122                    776            Deferred tax assets                                                                  2,309                  2,014            Vendor non-trade receivables                                                         6,641                  6,348            Other current assets                                                                 6,560                  4,529                                                                                            ----------             ----------               Total current assets                                                             51,943                 44,988          Long-term marketable securities                                                       89,567                 55,618          Property, plant and equipment, net                                                    10,487                  7,777          Goodwill                                                                               1,132                    896          Acquired intangible assets, net                                                        4,329                  3,536          Other assets                                                                           5,438                  3,556                                                                                            ----------             ----------               Total assets                                                               $    162,896           $    116,371                                                                                            ==========             ==========                                    LIABILITIES AND SHAREHOLDERS' EQUITY:          Current liabilities:            Accounts payable                                                              $     16,808           $     14,632            Accrued expenses                                                                    10,430                  9,247            Deferred revenue                                                                     5,822                  4,091                                                                                            ----------             ----------               Total current liabilities                                                        33,060                 27,970          Deferred revenue - non-current                                            2,530                  1,686          Other non-current liabilities                                                         15,560                 10,100                                                                                            ----------             ----------               Total liabilities                                                                51,150                 39,756                                                                                            ----------             ----------          Commitments and contingencies          Shareholders' equity:            Common stock, no par value; 1,800,000 shares authorized; 937,266 and                15,573                 13,331            929,277 shares issued and outstanding, respectively            Retained earnings                                                                   95,641                 62,841            Accumulated other comprehensive income                                                 532                    443                                                                                            ----------             ----------               Total shareholders' equity                                                      111,746                 76,615                                                                                            ----------             ----------                                                                                          $    162,896           $    116,371               Total liabilities and shareholders' equity                                                                                            ==========             ==========                
                                                                Apple Inc.                                     UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS                                                           (In millions)                                                                                            Nine Months Ended                                                                                -----------------------------------------                                                                                    June 30, 2012        June 25, 2011                                                                                -------------------- --------------------          Cash and cash equivalents, beginning of the period                            $     9,815          $    11,261                                                                                          ---------            ---------          Operating activities:             Net income                                                                      33,510               19,299            Adjustments to reconcile net income to cash generated by operating            activities:               Depreciation, amortization and accretion                                       2,296                1,271               Share-based compensation expense                                               1,292                  870               Deferred income tax expense                                                    4,066                2,232            Changes in operating assets and liabilities:               Accounts receivable, net                                                     (2,278)                (592)               Inventories                                                                    (346)                  162               Vendor non-trade receivables                                                   (293)                (955)               Other current and non-current assets                                         (3,238)              (1,551)               Accounts payable                                                               2,450                2,480               Deferred revenue                                                               2,575                1,276               Other current and non-current liabilities                                      1,686                2,608                                                                                          ---------            ---------               Cash generated by operating activities                                        41,720               27,100                                                                                          ---------            ---------          Investing activities:            Purchases of marketable securities                                            (121,091)             (75,133)            Proceeds from maturities of marketable securities                                10,344               16,396            Proceeds from sales of marketable securities                                     73,140               34,301            Payments made in connection with business acquisitions, net of cash               (350)                    0            acquired            Payments for acquisition of property, plant and equipment                       (4,834)              (2,615)            Payments for acquisition of intangible assets                                   (1,067)                (266)            Other                                                                              (56)                   34                                                                                          ---------            ---------               Cash used in investing activities                                           (43,914)             (27,283)                                                                                          ---------            ---------          Financing activities:            Proceeds from issuance of common stock                                              433                  577            Excess tax benefits from equity awards                                            1,036                  915            Taxes paid related to net share settlement of equity awards                     (1,145)                (479)                                                                                          ---------            ---------               Cash generated by financing activities                                           324                1,013                                                                                          ---------            ---------          (Decrease)/increase in cash and cash equivalents                                  (1,870)                  830                                                                                          ---------            ---------          Cash and cash equivalents, end of the period                                  $     7,945          $    12,091                                                                                          =========            =========          Supplemental cash flow disclosure:            Cash paid for income taxes, net                                             $     5,901          $     2,563                
                                                                                                      Apple Inc.                                                                              Q3 2012 Unaudited Summary Data                                                                         (Units in thousands, Revenue in millions)                                                                             Q2 2012                Q3 2011                Q3 2012                                                                     ---------------------- ---------------------- ----------------------                                                                                                                                           Sequential Change   Year/Year Change                                                                                                                                          ------------------- -------------------          Operating Segments                                          Mac Units   Revenue    Mac Units   Revenue    Mac Units   Revenue    Mac Units  Revenue  Mac Units  Revenue                                                                     ---------  ----------- ---------  ----------- ---------  ----------- ---------  -------  ---------  -------                    Americas                                             1,214    $ 13,182      1,487    $ 10,126      1,522    $ 12,806        25%     - 3%         2%      26%                    Europe                                               1,048       8,807        922       7,098        941       8,237      - 10%     - 6%         2%      16%                    Japan                                                  158       2,645        150       1,510        173       2,009         9%    - 24%        15%      33%                    Asia Pacific                                           771      10,153        620       6,332        593       7,887      - 23%    - 22%       - 4%      25%                    Retail                                                 826       4,399        768       3,505        791       4,084       - 4%     - 7%         3%      17%                                                                     ---------      ------  ---------      ------  ---------      ------          Total Operating Segments                                       4,017    $ 39,186      3,947    $ 28,571      4,020    $ 35,023         0%    - 11%         2%      23%                                                                     =========  === ======  =========  === ======  =========  === ======                                                                                                                                           Sequential Change   Year/Year Change                                                                                                                                          ------------------- -------------------          Product Summary                                               Units     Revenue      Units     Revenue      Units     Revenue      Units    Revenue    Units    Revenue                                                                     ---------  ----------- ---------  ----------- ---------  ----------- ---------  -------  ---------  -------                    Mac Desktops (1)(9)                                  1,199    $  1,563      1,155    $  1,580      1,010    $  1,287      - 16%    - 18%      - 13%    - 19%                    Mac Portables (2)(9)                                 2,818       3,510      2,792       3,525      3,010       3,646         7%       4%         8%       3%                                                                     ---------      ------  ---------      ------  ---------      ------          Subtotal Mac                                                   4,017       5,073      3,947       5,105      4,020       4,933         0%     - 3%         2%     - 3%                    iPod (3)(9)                                          7,673       1,207      7,535       1,325      6,751       1,060      - 12%    - 12%      - 10%    - 20%                    Other Music Related Products and Services (4)                    2,151                  1,571                  2,060                - 4%                 31%                    iPhone and Related Products and Services (5)(9)     35,064      22,690     20,338      13,311     26,028      16,245      - 26%    - 28%        28%      22%                    iPad and Related Products and Services (6)(9)       11,798       6,590      9,246       6,046     17,042       9,171        44%      39%        84%      52%                    Peripherals and Other Hardware (7)                                 643                    517                    663                  3%                 28%                    Software, Service and Other Sales (8)                              832                    696                    891                  7%                 28%                                                                                    ------                 ------                 ------          Total Apple                                                             $ 39,186               $ 28,571               $ 35,023               - 11%                 23%                                                                                === ======             === ======             === ======             (1)    Includes revenue from iMac, Mac mini and Mac Pro sales.             (2)    Includes revenue from MacBook, MacBook Air and MacBook Pro sales.             (3)    Includes revenue from iPod sales.             (4)    Includes revenue from sales from the iTunes Store, App Store and                    iBookstore in addition to sales of iPod services and Apple-branded                    and third-party iPod accessories.             (5)    Includes revenue from sales of iPhone, iPhone services, and                    Apple-branded and third-party iPhone accessories.             (6)    Includes revenue from sales of iPad, iPad services, and                    Apple-branded and third-party iPad accessories.             (7)    Includes revenue from sales of displays, networking products and                    other hardware.             (8)    Includes revenue from sales of Apple-branded and third-party Mac                    software, and services.             (9)    Includes amortization of related revenue deferred for non-software                    services and embedded software upgrade rights.                

SOURCE: Apple

                        Apple           Steve Dowling, 408-974-1896 (Press)           dowling@apple.com           Nancy Paxton, 408-974-5420 (Investor Relations)           paxton1@apple.com           Joan Hoover, 408-974-4570 (Investor Relations)           hoover1@apple.com                

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