Wednesday, January 25, 2012

Apple Reports Legendary Quarter: Tech Record Revenues & Income

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Apple Reports Legendary Quarter: Tech Record Revenues & Income

Apple Financial Summary Calendar Q4 2011 Apple financial performance was legendary, [insert favorite superlative here], and literally off the charts. This was the greatest quarter ever reported by a technology company in history. Every financial metric was an Apple quarterly record: cash flow per share, earnings per share, total revenues, operating income, net income, gross profit margin, operating margin, net margin, return on assets. The lone negative from all the financial data reviewed below was iPod sales dropped YoY -26%. No other negatives were found anywhere: QoQ, YoY, regional revenues, product revenues, margins, you name it, etc. CEO Tim Cook summarized, "We’re thrilled with our outstanding results and record-breaking sales of iPhones, iPads and Macs. Apple’s momentum is incredibly strong, and we have some amazing new products in the pipeline." Financial position continues as legendary with total assets of $138.7 billion, including $97.6 billion in cash and investments. Apple generated $17.5 billion in cash for the quarter.

Apple Income Statement Calendar Q4 2011 Apple reported total revenues of $46.33 billion, net income of $17.34 billion, and earnings per share of $13.87. All 3 are all-time highs. From the prior calendar Q3 2011, total revenues were +63.89%, net income +97.25%, and earnings per share +96.74%. From the prior calendar year Q4 2010, these were +73.27%, +117.59%, and +115.71%, respectively. Gross, operating, and net margins also increased impressively to 44.68%, 37.42%, and 28.20%, respectively. Cash flow from operations per share increased to a record $18.64. The operating expense ratio decreased yet again to an amazingly low 7.26%. iPhones were the primary driver of product sales, comprising 52.7% of total revenues, an all-time high. The Americas region, presumably mostly the USA, was the primary driver of regional sales, comprising 38.2% of total revenues, a 6-quarter high.

Apple Balance Sheet Calendar Q4 2011 Total assets increased to a record $138.67 billion. The capital to assets ratio is a rock solid 65%. The current ratio is adequate at 39% and has been lowered in recent quarters as more current investment assets have been allocated to long-term marketable securities, a noncurrent asset. Apple is very liquid with strong capital. Apple has over $30 billion in cash, cash equivalents, and marketable securities. Add long-term marketable securities of $67 billion and Apple's cash and investment reserves are a mind-boggling $97.6 billion! Return on assets spiked upwards to an extraordinary 30.34%.

Apple Outlook Calendar Q1 2012 "Looking ahead to the second fiscal quarter of 2012, which will span 13 weeks, we expect revenue of about $32.5 billion and we expect diluted earnings per share of about $8.50.”

Apple Performance by the Quarters

Apple Cash Flow per Share and Earnings per Share Current Cash Flow per Share of $18.64 is a record and easily exceeded the previous all-time high of $11.84. Current Earnings per Share of $13.87 is a record and easily exceed the previous all-time high of $7.79.


Apple Total Revenues, Operating Income, and Net Income All 3 increased to all-time and legendary highs. Current Total Revenues of $46.33 billion, Operating Income of $17.34 billion, and Net Income of $13.06 billion are the highest ever reported by a technology company.


Apple Gross Margin, Operating Margin, and Net Margin All 3 increased to multi-year, if not all-time, highs. Current Gross Margin of 44.68%, Operating Margin of 37.42%, and Net Margin of 28.20% are extraordinary in view of the unprecedented increase in total revenues. Usually a company sacrifices some margin to generate such a large increase in revenues. Rarely does a graph of margins show such a spike upwards.


Apple Return on Assets Current Return on Assets of 30.34% is a multi-year, if not all-time high and extraordinary. As with margins, rarely does a graph of ROA, an annualized 4-quarter average, show such a spike upwards.


Apple Growth Rates YoY Current Total Revenues Growth YoY of +73.27% is incredible, considering the growth was from $26.74 billion to $46.33 billion in one year! Current Earnings per Share Growth YoY of +115.71% is superb from $6.43 to $13.87.


Apple Regional Revenues All regions reported all-time highs. International revenues accounted for 58% of Apple's total revenues in the latest quarter reported, down from the prior quarter of 63%. This is because everyone who didn't have an iPhone in the USA apparently bought one in Q4 2011. Sales in all regions grew, but the Americas exploded to $17.71 billion and 38.23% of total revenues. Europe posted a strong gain to $11.26 billion and 24.29%. Asia Pacific increased to $7.70 billion and 16.61. Retail increased to $6.12 billion and 13.20%. Japan tripled to $3.55 billion and 7.66%. All regions were up 50%+ YoY. Americas was +84% QoQ and +92% YoY. Japan was +220% QoQ and +150% YoY.


Apple Product Revenues All products sales reached all-time highs. iPhone sales exponentially increased +122% QoQ and +133% YoY to $24.42 billion from $10.47 billion a year ago. By comparison, Apple's total revenues in Q3 2010 were $20.34 billion. iPad sales increased +33% QoQ and +98% YoY to $9.15 billion. Mac Computers sales increased +5% QoQ and +22% YoY to $6.60 billion. Music Products & Services sales increased +19% QoQ and +29% YoY to $3.64 billion. iPods sales increased +129% QoQ, but dropped -26% YoY, to $2.53 billion.


Apple Operating Expense Ratio The current Operating Expense Ratio of 7.26% is not only extremely low, but unheard of by both technology sector and overall corporate standards. The operating expense ratio is operating expenses divided by total revenues. This indicates increased efficiency which results in a higher proportion of revenues reaching the bottom line, net income and earnings per share.


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Tuesday, January 10, 2012

Apple to Announce Quarterly Earnings on Tuesday, January 24: Legendary Quarter Expected

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Apple (AAPL) to Announce Quarterly Earnings

Apple, Inc. will report calendar Q4 2011 financial results on Tuesday, January 24, after market close. The conference call will be at 2:00 p.m. PT.

Apple Future and Past Financial Performance

Estimated Calendar Q4 2011 Earnings per Share (GAAP)
Yahoo Finance Analysts Estimates: $9.87 avg, $8.88 low, $10.75 high, 46 analysts
Prior Quarter: $7.05
Prior Year: $6.43
Apple Outlook: "about" $9.30

Estimated Calendar Q4 2011 Total Revenues (GAAP)
Yahoo Finance Analysts Estimates: $38.28B avg, $35.24B low, $41.34B high, 44 analysts
Prior Quarter: $28.27B Prior Year: $26.74B
Apple Outlook: "about" $37B

Prior Calendar Q3 2011 Financial Results (GAAP) When Apple reports Q4 2011, the 3 months ended December, financial results on January 24, Apple is expected to meet, beat, or miss various prior quarterly results. These prior quarterly GAAP financial results were:
Total Revenues $28.27B
Operating Income $8.71B
Net Income $6.62B
Earnings per Share $7.05
Cash Flow per Share $11.10
Gross Margin 40.25%
Operating Margin 30.81%
Net Margin 23.43%

Summary (GAAP) Overall, Apple is expected to easily beat QoQ and YoY for Total Revenues and Earnings per Share. Apple should beat their own calendar Q4 2011 outlook for earnings per share ($9.30) and total revenues ($37.00B) and meet on gross profit margin (40%). Q4 is historically the strongest quarter for Apple on an annual cycle and this is expected to be the greatest Q4 in Apple's history and dare we say the greatest quarter in tech history. Expectations have never been so high for a tech company quarter! Therefore, Apple is also expected to beat QoQ and YoY for Operating Income, Net Income, and Cash Flow per Share. Apple should at least meet QoQ and YoY for gross, operating, and net margins.

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