Apple Reports Fourth Quarter Results

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Apple Reports Fourth Quarter Results

26.9 Million iPhones Sold; Record Fourth Quarter Revenue and Profit

Board Declares Quarterly Dividend of $2.65 per Common Share


CUPERTINO, Calif.--(BUSINESS WIRE)-- Apple® today announced financial results for its fiscal 2012 fourth quarter ended September 29, 2012. The Company posted quarterly revenue of $36.0 billion and quarterly net profit of $8.2 billion, or $8.67 per diluted share. These results compare to revenue of $28.3 billion and net profit of $6.6 billion, or $7.05 per diluted share, in the year-ago quarter. Gross margin was 40.0 percent compared to 40.3 percent in the year-ago quarter. International sales accounted for 60 percent of the quarter's revenue.

The Company sold 26.9 million iPhones in the quarter, representing 58 percent unit growth over the year-ago quarter. Apple sold 14.0 million iPads during the quarter, a 26 percent unit increase over the year-ago quarter. The Company sold 4.9 million Macs during the quarter, a 1 percent unit increase over the year-ago quarter. Apple sold 5.3 million iPods, a 19 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 November 15, 2012, to shareholders of record as of the close of business on November 12, 2012.

"We're very proud to end a fantastic fiscal year with record September quarter results," said Tim Cook, Apple's CEO. "We're entering this holiday season with the best iPhone, iPad, Mac and iPod products ever, and we remain very confident in our new product pipeline."

"We're pleased to have generated over $41 billion in net income and over $50 billion in operating cash flow in fiscal 2012," said Peter Oppenheimer, Apple's CFO. "Looking ahead to the first fiscal quarter of 2013, we expect revenue of about $52 billion and diluted earnings per share of about $11.75."

Apple will provide live streaming of its Q4 2012 financial results conference call beginning at 2:00 p.m. PDT on October 25, 2012 at www.apple.com/quicktime/qtv/earningsq412. 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; March 31, 2012; and June 30, 2012; and its Form 10-K for the year ended September 29, 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.

© 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 EndedTwelve Months Ended

September 29,
2012

 

September 24,
2011

September 29,
2012

 

September 24,
2011

 
Net sales$35,966$28,270$156,508$108,249
Cost of sales (1) 21,565 16,890 87,846 64,431

 

Gross margin 14,401 11,380 68,662 43,818
 
Operating expenses:
Research and development (1)9066453,3812,429
Selling, general and administrative (1) 2,551 2,025 10,040 7,599
 
Total operating expenses 

3,457

 2,670 13,421 10,028
 
Operating income10,9448,71055,24133,790
 
Other income/(expense), net (51) 81 522 415
 
Income before provision for income taxes10,8938,79155,76334,205
 
Provision for income taxes 2,670 2,168 14,030 8,283
 
Net income$8,223$6,623$41,733$25,922
 
Earnings per share:
Basic$8.76$7.13$44.64$28.05
Diluted$8.67$7.05$44.15$27.68
 
Shares used in computing earnings per share:
Basic938,343928,280934,818924,258
Diluted948,186939,517945,355936,645
 
Cash dividends declared per common share$2.65$0.00$2.65$0.00
 
(1) Includes share-based compensation expense as follows:
Cost of sales$69$45$265$200
Research and development$168$114$668$450
Selling, general and administrative$211$139$807$518
 

Apple Inc.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions, except number of shares which are reflected in thousands)

  

September 29,
2012

September 24,
2011

 
ASSETS:
 
Current assets:
Cash and cash equivalents$10,746$9,815
Short-term marketable securities18,38316,137
Accounts receivable, less allowances of $98 and $53, respectively10,9305,369
Inventories791776
Deferred tax assets2,5832,014
Vendor non-trade receivables7,7626,348
Other current assets 6,458 4,529
Total current assets57,65344,988
 
Long-term marketable securities92,12255,618
Property, plant and equipment, net15,4527,777
Goodwill1,135896
Acquired intangible assets, net4,2243,536
Other assets 5,478 3,556
Total assets$176,064$116,371
 
 
LIABILITIES AND SHAREHOLDERS' EQUITY:
 
Current liabilities:
Accounts payable$21,175$14,632
Accrued expenses11,4149,247
Deferred revenue 5,953 4,091
Total current liabilities38,54227,970
 
Deferred revenue - non-current2,6481,686
Other non-current liabilities 16,664 10,100
Total liabilities 57,854 39,756
 
Commitments and contingencies
 
Shareholders' equity:
Common stock, no par value; 1,800,000 shares authorized; 939,208 and 929,277 shares issued and outstanding, respectively16,42213,331
Retained earnings101,28962,841
Accumulated other comprehensive income 499 443
Total shareholders' equity 118,210 76,615
 
Total liabilities and shareholders' equity$176,064$116,371
 

Apple Inc.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

 
Twelve Months Ended

September 29,
2012

 

September 24,
2011

 
Cash and cash equivalents, beginning of the year$9,815$11,261
 
Operating activities:
Net income41,73325,922
Adjustments to reconcile net income to cash generated by operating activities:
Depreciation and amortization3,2771,814
Share-based compensation expense1,7401,168
Deferred income tax expense4,4052,868
Changes in operating assets and liabilities:
Accounts receivable, net(5,551)143
Inventories(15)275
Vendor non-trade receivables(1,414)(1,934)
Other current and non-current assets(3,162)(1,391)
Accounts payable4,4672,515
Deferred revenue2,8241,654
Other current and non-current liabilities2,552 4,495
 
Cash generated by operating activities50,856 37,529
 
Investing activities:
Purchases of marketable securities(151,232)(102,317)
Proceeds from maturities of marketable securities13,03520,437
Proceeds from sales of marketable securities99,77049,416
Payments made in connection with business acquisitions, net of cash acquired(350)(244)
Payments for acquisition of property, plant and equipment(8,295)(4,260)
Payments for acquisition of intangible assets(1,107)(3,192)
Other(48) (259)
 
Cash used in investing activities(48,227) (40,419)
 
Financing activities:
Proceeds from issuance of common stock665831
Excess tax benefits from equity awards1,3511,133
Dividends and dividend equivalent rights paid(2,488)0
Taxes paid related to net share settlement of equity awards(1,226) (520)
 
Cash (used in)/generated by financing activities(1,698) 1,444
 
Increase/(decrease) in cash and cash equivalents931 (1,446)
 
Cash and cash equivalents, end of the year$10,746$9,815
 
Supplemental cash flow disclosure:
Cash paid for income taxes, net$7,682$3,338
 
           
Apple Inc.
Q4 2012 Unaudited Summary Data
(Units in thousands, Revenue in millions)
 
   
Q3 2012Q4 2011Q4 2012
Sequential ChangeYear/Year Change
Operating SegmentsMac UnitsRevenueMac UnitsRevenueMac UnitsRevenueMac UnitsRevenue
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