Apple Reports Fourth Quarter Results

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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 Ended   Twelve 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)     906     645     3,381     2,429
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 income     10,944     8,710     55,241     33,790
                         
Other income/(expense), net     (51)     81     522     415
                         
Income before provision for income taxes     10,893     8,791     55,763     34,205
                         
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:                        
Basic     938,343     928,280     934,818     924,258
Diluted     948,186     939,517     945,355     936,645
                         
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 securities     18,383     16,137
Accounts receivable, less allowances of $98 and $53, respectively     10,930     5,369
Inventories     791     776
Deferred tax assets     2,583     2,014
Vendor non-trade receivables     7,762     6,348
Other current assets     6,458     4,529
Total current assets     57,653     44,988
             
Long-term marketable securities     92,122     55,618
Property, plant and equipment, net     15,452     7,777
Goodwill     1,135     896
Acquired intangible assets, net     4,224     3,536
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 expenses     11,414     9,247
Deferred revenue     5,953     4,091
Total current liabilities     38,542     27,970
             
Deferred revenue – non-current     2,648     1,686
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, respectively     16,422     13,331
Retained earnings     101,289     62,841
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 income   41,733     25,922
Adjustments to reconcile net income to cash generated by operating activities:          
Depreciation and amortization   3,277     1,814
Share-based compensation expense   1,740     1,168
Deferred income tax expense   4,405     2,868
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 payable   4,467     2,515
Deferred revenue   2,824     1,654
Other current and non-current liabilities   2,552     4,495
           
Cash generated by operating activities   50,856     37,529
           
Investing activities:          
Purchases of marketable securities   (151,232)     (102,317)
Proceeds from maturities of marketable securities   13,035     20,437
Proceeds from sales of marketable securities   99,770     49,416
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 stock   665     831
Excess tax benefits from equity awards   1,351     1,133
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 equivalents   931     (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 2012   Q4 2011   Q4 2012                
                                Sequential Change   Year/Year Change
Operating Segments   Mac Units   Revenue   Mac Units   Revenue   Mac Units   Revenue   Mac Units   Revenue   Mac Units   Revenue
    Americas   1,522   $ 12,806   1,716   $ 9,648   1,651   $ 13,810   8%   8%   - 4%   43%
    Europe   941     8,237   1,176     7,397   1,135     8,023   21%   - 3%   - 3%   8%
    Japan   173     2,009   175     1,111   151     2,367   - 13%   18%   - 14%   113%
    Asia Pacific   593     7,887   731     6,530   877     7,537   48%   - 4%   20%   15%
    Retail   791     4,084   1,096     3,584   1,109     4,229   40%   4%   1%   18%
Total Operating Segments   4,020   $ 35,023   4,894   $ 28,270   4,923   $ 35,966   22%   3%   1%   27%
                                             
                                             
                                             
                                             
                                Sequential Change   Year/Year Change
Product Summary   Units   Revenue   Units   Revenue   Units   Revenue   Units   Revenue   Units   Revenue
    Mac Desktops (1)(9)   1,010   $ 1,287   1,278   $ 1,687   968   $ 1,254   - 4%   - 3%   - 24%   - 26%
    Mac Portables (2)(9)   3,010     3,646   3,616     4,585   3,955     5,363   31%   47%   9%   17%
Subtotal Mac   4,020     4,933   4,894     6,272   4,923     6,617   22%   34%   1%   6%
    iPod (3)(9)   6,751     1,060   6,622     1,103   5,344     820   - 21%   - 23%   - 19%   - 26%
    Other Music Related Products and Services (4)         2,060         1,678         2,296       11%       37%
    iPhone and Related Products and Services (5)(9)   26,028     16,245   17,073     10,980   26,910     17,125   3%   5%   58%   56%
    iPad and Related Products and Services (6)(9)   17,042     9,171   11,123     6,868   14,036     7,510   - 18%   - 18%   26%   9%
    Peripherals and Other Hardware (7)         663         640         706       6%       10%
    Software, Service and Other Sales (8)         891         729         892       0%       22%
Total Apple       $ 35,023       $ 28,270       $ 35,966       3%       27%
                                             
                                             
                                             
(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.

 

Contact:

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