Apple Digest: Apple to Announce Earnings on Tuesday, October 18 (Charts) *Financial Performance Review* AAPL

● AAPL ●

Apple (AAPL) will report calendar Q3 2011 financial results on Tuesday, October 18, 2011

Apple (AAPL) Financial Performance Review

Apple will report calendar Q3 2011 financial results on Tuesday, October 18, after market close and usually just before the earnings conference call. The conference call will be at 2:00 p.m. PT.

Apple financial performance charts for prior quarters have been posted on the Apple Financial Performance page along with additional quarterly commentary and will be updated for this next quarterly report. The charts are also lower in this post.

The Apple financial performance charts are:

Apple Performance by the Quarters

Earnings per Share (Diluted) and Cash Flow per Share

Total Revenues, Operating Income, Net Income

Gross Margin, Operating Margin, Net Margin

Return on Assets

Total Revenues and Earnings per Share Growth YoY

Geographic Revenues

Product Revenues
Operating Expense Ratio

Apple Future and Past Financial Performance

Earnings per Share

Yahoo Finance Analysts Estimates: $7.14 avg, $6.05 low est, $8.22 high est, 45 analysts

Prior Quarter: $7.79
Prior Year: $4.64
Apple Outlook: $5.50

Total Revenues
Yahoo Finance Analysts Estimates: $29.08B avg, $26.09B low est, $31.99B high est, 43 analysts

Prior Quarter: $28.57B
Prior Year: $20.34B
Apple Outlook: $25.00B

Prior Calendar Q2 2011 Financial Results

When Apple reports calendar Q3 2011, the 3 months ended September, financial results on October 18, Apple should meet or beat various prior quarterly results. These results are charted on the Apple Financial Performance page. These prior quarterly GAAP financial results were:

Total Revenues $28.57B

Operating Income $7.874B

Net Income $9.38B

Earnings per Share (Diluted) $7.79

Cash Flow per Share $11.84

Gross Profit Margin 41.73%

Operating Income Margin 32.83%

Net Income Margin 25.58%

Summary

Overall, calendar Q3 2011 is expected to exceed prior quarter Q2 2011 financial results and easily beat YoY. Apple should beat their own calendar Q3 2011 outlook ($5.50 earnings per share, $25.00B total revenues, and 38% gross profit margin). The question is how much higher Apple will report? The analysts' average EPS is $7.14, which Apple should beat. For calendar Q3 2011, Apple should beat QoQ on Total Revenues, Operating Income, Net Income, Earnings per Share, and Cash Flow per Share. Apple should match or be just slightly below QoQ on Gross Profit Margin, Operating Income Margin, and Net Income Margin. Any margin beat QoQ would be extraordinary. Apple is expected to beat the Apple Outlook calendar Q3 Gross Profit Margin (38.00%), which has become the standard outlook by CFO Peter Oppenheimer. The Gross Profit Margin for the past 3 quarters have been 41.73%, 41.42%, and 38.51%. The detailed quarter by quarter charts are on the Apple Financial Performance page.

Apple Earnings Soar to All-Time High in Q2!: Astounding financial performance & position!

Apple Financial Summary Q2 2011 Apple + Financial Performance = Superlatives! Previous Apple financial performance records were broken one after another in this latest calendar Q2 2011. Apple has set the bar unbelievably high for itself and the technology sector. Apple reported records: total revenues, net income, earnings per share, cash flow per share, operating margin, and net margin plus near-record gross margin. Financial performance continues onwards and upwards. Financial position is legendary; total assets are now $106.76 billion, including $76.16 billion in cash and investments.

Apple Income Statement Q2 2011 Apple reported record total revenues of $28.57B, record net income of $7.31B, and record earnings per share of $7.79. These are yet again stellar financial performance results! From the prior calendar Q1 2011, total revenues were up +16%, net income up +22%, and earnings per share up +22%. From the prior calendar year Q2 2010, these were up +82%, +125%, and +122%, respectively. All are incredible increases QoQ and YoY! Margins also increased in calendar Q2, which may be the most impressive result. For calendar Q2 2011, gross, operating, and net margins were 41.73%, 32.83%, and 25.58%, respectively. For the prior calendar Q1 2011, these were 41.42%, 31.92%, and 24.27%, respectively. Cash flow from operations was an astounding, and record, $11.84 per share. Apple generated an astonishing $11.1 billion in cash for the quarter!

Apple Balance Sheet Calendar Q2 2011 Total assets increased a staggering +12.49% QoQ to a record $106.76 billion from the prior quarter of $94.90 billion. The capital to assets ratio (total stockholders' equity divided by total assets) is a rock solid 64.95%. The current ratio (current assets divided by total assets) dropped to 43.93%, which continues very liquid. More current assets have been allocated to long-term marketable securities, a noncurrent asset. Apple is very liquid with strong capital. Apple has over $28B in cash, cash equivalents, and marketable securities. Add long-term marketable securities of $47.7B and Apple's cash and investment reserves are a mind-boggling $76+ billion!

Apple Performance by the Quarters (Charts)

Apple Earnings per Share and Cash Flow per Share (Chart) Below is a chart of quarterly earnings per diluted share and quarterly cash flow from operations per diluted share (before purchases of property and equipment). Current Earnings per Share of $7.79 is an all-time record high and an amazing +22% increase over prior Q1 2011 of $6.40. Current Cash Flow per Share of $11.84 is also an all-time record high and an unbelievable +78% increase over prior Q1 2011 of $6.64. Recent chart data is:

Quarter, Earnings per Diluted Share, Cash Flow per Diluted Share

Jun10: $3.51, $5.18

Sep10: $4.64, $6.12

Dec10: $6.43, $10.47
Mar11: $6.40, $6.64
Jun11: $7.79, $11.84

Apple Total Revenues, Operating Income, and Net Income (Chart) Below is a chart of quarterly total revenues, operating income, and net income. For Q2 2011, all 3 are all-time record highs for Apple. Current Total Revenues of $28.57B is a very strong +16% increase from prior Q1 2011 of $24.67B. Current Operating Income of $9.38B is a significant increase over prior Q1 2011 of $7.87B. Current Net Income of $7.31B is also a strong increase over prior Q1 2011 of $5.99B. Recent chart data is:

Quarter, Total Revenues, Operating Income, Net Income

Jun10: $15.7B, $4.2B, $3.25B
Sep10: $20.3B, $5.4B, $4.3B
Dec10: $26.7B, $7.8B, $6.0B
Mar11: $24.7B, $7.9B, $5.99B
Jun11: $28.6B, $9.4B, $7.3B

Apple Gross Margin, Operating Margin, and Net Margin (Chart) Below is a chart of quarterly gross margin, operating margin, and net margin. Current Gross Margin increased yet again to a multi-year, if not all-time, high of 41.73%. Current Operating Margin of 32.83% is a multi-year, if not all-time, high. Current Net Margin of 25.58% sets a technology sector standard is a multi-year, if not all-time, high. This is the 5th consecutive quarter that net margin has been above 20%. Recent chart data is:

Quarter, Gross Margin, Operating Margin, Net Margin

Jun 10: 39.08%, 26.97%, 20.72%

Sep10: 36.93%, 26.78%, 21.18%

Dec10: 38.51%, 29.27%, 22.45%

Mar11: 41.42%, 31.92%, 24.27%
Jun11: 41.73%, 32.83%, 25.58%

Apple Return on Assets (Chart) Below is a chart of quarterly return on average assets, annualized. The quarterly ROA is quarter on quarter, (Q/Q or QoQ). Current Return on Assets of 28.99% rebounded and is just below the Q4 2010 peak of 29.66%. Apple's return on assets are not only incredible, but for a technology giant such as Apple (total assets $106.8 billion) to be above 25+% ROA is legendary. Limited chart data (due to Change in Accounting Method) is:

Quarter, Quarterly ROA Annualized

Jun 10: 21.37%

Sep10: 24.63%

Dec10: 29.66%

Mar11: 26.37%
Jun11: 28.99%

Apple Growth Rates (Chart) Below is a chart of the annual (YoY, Y/Y, annual change) growth rates for revenues and earnings per share. Apple, as with some other technology companies, has an annual cyclical high in Q4 and an annual cyclical low in Q1. Therefore, comparing YoY growth rates best reflects Apple's amazing growth. To maintain these high flying growth rates, even until now, is astonishing. These growth rates should begin to slow in future quarters. Current Total Revenues Growth of +81.98% continues the strong revenue gains and is a near-record. The TRG chart average is a very strong +63.40%. Current Earnings per Share Growth of +121.94% is literally off the charts and a record. The EPSG chart average is an unbelievable +80.61%. Recent chart data is:

Quarter, Total Revenues Change %, Earnings Per Share Change %

Jun10: +61.29%, +74.63%

Sep10: +66.65%, +67.51%

Dec10: +70.51%, +75.20%

Mar11: +82.73%, +92.19%
Jun11: +81.98%, +121.94%

Apple Geographic Revenues (Chart) Below is a chart of geographic revenues by quarter and is limited to what Apple chooses to disclose. International revenues accounted for 62% of Apple's total revenues in the latest quarter reported, Q2 2011. This is an increase from the 59% reported last quarter. Noteworthy is the increasing sales in the Asia Pacific region, now 22.2% of total sales compared to 11.6% a year ago, Q2 2010. Recent chart data is:
Quarter, Americas, Europe, Asia Pacific, Retail, Japan
Jun10: $6.2B, $4.2B, $1.8B, $2.6B, $910M
Sep10: $7.2B, $5.5B, $2.7B, $3.6B, $1.4B
Dec10: $9.2B, $7.3B, $4.98B, $3.8B, $1.4B

Mar11: $9.3B, $6.0B, $4.7B, $3.2B, $1.4B
Jun11: $10.1B, $7.1B, $6.3B, $3.5B, $1.5B

Apple Product Revenues (Chart) Below is a chart of product revenues by quarter and is limited to what Apple chooses to disclose. Computers increased to $5.1B to $4.98B QoQ. iPods dropped again to $1.3B from $1.6B. iTunes were down to $2.78B from $2.96B. iPhone was another huge gain to $13.3B from $12.3B. iPad soared to $6.05B from $2.84B and carried the quarter, with some help from iPhone. Recent chart data is:

Quarter, iPhone, iPad, Computers, iTunes Other, iPods

Jun10: $5.3B, $2.2B, $4.4B, $2.3B, $1.5B

Sep10: $8.8B, $2.8B, $4.9B, $2.4B, $1.5B

Dec10: $10.5B, $4.6B, $5.4B, $2.85B, $3.4B

Mar11: $12.3B, $2.8B, $4.98B, $2.96, $1.6B
Jun11: $13.3B, $6.0B, $5.1B, $2.8B, $1.3B

Apple Operating Expense Ratio (Chart) Below is a chart of quarterly operating expense ratio, which is operating expenses divided by total revenues. The current Operating Expense Ratio of 8.90% is a multi-year low, probably an all-time low, and well below both technology peers and other companies in general. The OER chart average of 11.32%. This indicates in the current QE June 2011 both increased efficiency plus a higher proportion of revenues reaching the bottom line, net income and earnings per share. Recent chart data is:

Quarter, Operating Expense Ratio

Jun10: 12.11%

Sep10: 10.15%

Dec10: 9.24%

Mar11: 9.50%
Jun11: 8.90%

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