Apple® today announced financial results for its fiscal 2014 first
quarter ended December 28, 2013. The Company posted record quarterly
revenue of $57.6 billion and quarterly net profit of $13.1 billion, or
$14.50 per diluted share. These results compare to revenue of $54.5
billion and net profit of $13.1 billion, or $13.81 per diluted share, in
the year-ago quarter. Gross margin was 37.9 percent compared to 38.6
percent in the year-ago quarter. International sales accounted for 63
percent of the quarter’s revenue.
The Company sold 51 million iPhones, an all-time quarterly record,
compared to 47.8 million in the year-ago quarter. Apple also sold 26
million iPads during the quarter, also an all-time quarterly record,
compared to 22.9 million in the year-ago quarter. The Company sold 4.8
million Macs, compared to 4.1 million in the year-ago quarter.
Apple’s Board of Directors has declared a cash dividend of $3.05 per
share of the Company’s common stock. The dividend is payable on February
13, 2014, to shareholders of record as of the close of business on
February 10, 2014.
“We are really happy with our record iPhone and iPad sales, the strong
performance of our Mac products and the continued growth of iTunes,
Software and Services,” said Tim Cook, Apple’s CEO. “We love having the
most satisfied, loyal and engaged customers, and are continuing to
invest heavily in our future to make their experiences with our products
and services even better.”
“We generated $22.7 billion in cash flow from operations and returned an
additional $7.7 billion in cash to shareholders through dividends and
share repurchases during the December quarter, bringing cumulative
payments under our capital return program to over $43 billion,” said
Peter Oppenheimer, Apple’s CFO.
Apple is providing the following guidance for its fiscal 2014 second
quarter:
• revenue between $42 billion and $44 billion
• gross margin between 37 percent and 38 percent
• operating expenses between $4.3 billion and $4.4 billion
• other income/(expense) of $200 million
• tax rate of 26.2 percent
Apple will provide live streaming of its Q1 2014 financial results
conference call beginning at 2:00 p.m. PST on January 27, 2014 at www.apple.com/quicktime/qtv/earningsq114.
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, gross margin,
operating expenses, other income/(expense), and tax rate. 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 28, 2013 and its Form 10-Q for the
quarter ended December 28, 2013 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.
© 2014 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
|
|
|
December 28, 2013
|
|
December 29, 2012
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
57,594
|
|
$
|
54,512
|
Cost of sales (1)
|
|
|
35,748
|
|
|
33,452
|
Gross margin
|
|
|
21,846
|
|
|
21,060
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
Research and development (1)
|
|
|
1,330
|
|
|
1,010
|
Selling, general and administrative (1)
|
|
|
3,053
|
|
|
2,840
|
Total operating expenses
|
|
|
4,383
|
|
|
3,850
|
Operating income
|
|
|
17,463
|
|
|
17,210
|
Other income/(expense), net
|
|
|
246
|
|
|
462
|
Income before provision for income taxes
|
|
|
17,709
|
|
|
17,672
|
Provision for income taxes
|
|
|
4,637
|
|
|
4,594
|
Net income
|
|
$
|
13,072
|
|
$
|
13,078
|
|
|
|
|
|
|
|
Earnings per share:
|
|
|
|
|
|
|
Basic
|
|
$
|
14.59
|
|
$
|
13.93
|
Diluted
|
|
$
|
14.50
|
|
$
|
13.81
|
|
|
|
|
|
|
|
Shares used in computing earnings per share:
|
|
|
|
|
|
|
Basic
|
|
|
896,072
|
|
|
938,916
|
Diluted
|
|
|
901,452
|
|
|
947,217
|
|
|
|
|
|
|
|
Cash dividends declared per common share
|
|
$
|
3.05
|
|
$
|
2.65
|
|
|
|
|
|
|
|
(1) Includes share-based compensation expense as follows:
|
|
|
|
|
|
|
Cost of sales
|
|
$
|
109
|
|
$
|
85
|
Research and development
|
|
$
|
289
|
|
$
|
224
|
Selling, general and administrative
|
|
$
|
283
|
|
$
|
236
|
|
|
|
|
|
|
|
Apple Inc.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except number of shares which are reflected in
thousands)
|
|
|
|
|
|
|
|
December 28, 2013
|
|
September 28, 2013
|
|
|
|
|
|
|
|
ASSETS:
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
14,077
|
|
$
|
14,259
|
Short-term marketable securities
|
|
|
26,634
|
|
|
26,287
|
Accounts receivable, less allowances of $94 and $99, respectively
|
|
|
14,200
|
|
|
13,102
|
Inventories
|
|
|
2,122
|
|
|
1,764
|
Deferred tax assets
|
|
|
3,742
|
|
|
3,453
|
Vendor non-trade receivables
|
|
|
10,998
|
|
|
7,539
|
Other current assets
|
|
|
8,574
|
|
|
6,882
|
Total current assets
|
|
|
80,347
|
|
|
73,286
|
|
|
|
|
|
|
|
Long-term marketable securities
|
|
|
118,131
|
|
|
106,215
|
Property, plant and equipment, net
|
|
|
15,488
|
|
|
16,597
|
Goodwill
|
|
|
2,022
|
|
|
1,577
|
Acquired intangible assets, net
|
|
|
4,105
|
|
|
4,179
|
Other assets
|
|
|
5,091
|
|
|
5,146
|
Total assets
|
|
$
|
225,184
|
|
$
|
207,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY:
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
29,588
|
|
$
|
22,367
|
Accrued expenses
|
|
|
15,824
|
|
|
13,856
|
Deferred revenue
|
|
|
8,357
|
|
|
7,435
|
Total current liabilities
|
|
|
53,769
|
|
|
43,658
|
|
|
|
|
|
|
|
Deferred revenue – non-current
|
|
|
3,071
|
|
|
2,625
|
Long-term debt
|
16,961
|
16,960
|
Other non-current liabilities
|
|
|
21,699
|
|
|
20,208
|
Total liabilities
|
|
|
95,500
|
|
|
83,451
|
|
|
|
|
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' equity:
|
|
|
|
|
|
|
Common stock, no par value; 1,800,000 shares authorized; 892,447 and
899,213 shares issued and outstanding, respectively
|
|
|
20,559
|
|
|
19,764
|
Retained earnings
|
|
|
109,431
|
|
|
104,256
|
Accumulated other comprehensive income/(loss)
|
|
|
(306)
|
|
|
(471)
|
Total shareholders' equity
|
|
|
129,684
|
|
|
123,549
|
Total liabilities and shareholders' equity
|
|
$
|
225,184
|
|
$
|
207,000
|
|
|
|
|
|
|
|
Apple Inc.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
|
|
|
|
|
|
Three Months Ended
|
|
|
December 28, 2013
|
|
December 29, 2012
|
|
|
|
|
Cash and cash equivalents, beginning of the period
|
|
$
|
14,259
|
|
$
|
10,746
|
|
|
|
|
|
|
Operating activities:
|
|
|
|
|
|
Net income
|
|
13,072
|
|
|
13,078
|
Adjustments to reconcile net income to cash generated by operating
activities:
|
|
|
|
|
|
Depreciation and amortization
|
|
2,144
|
|
|
1,588
|
Share-based compensation expense
|
|
681
|
|
|
545
|
Deferred income tax expense
|
|
1,253
|
|
|
1,179
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
Accounts receivable, net
|
|
(1,098)
|
|
|
(668)
|
Inventories
|
|
(358)
|
|
|
(664)
|
Vendor non-trade receivables
|
|
(3,459)
|
|
|
(2,174)
|
Other current and non-current assets
|
|
(319)
|
|
|
413
|
Accounts payable
|
|
8,191
|
|
|
6,145
|
Deferred revenue
|
|
1,368
|
|
|
1,611
|
Other current and non-current liabilities
|
|
1,195
|
|
|
2,373
|
Cash generated by operating activities
|
|
22,670
|
|
|
23,426
|
|
|
|
|
|
|
Investing activities:
|
|
|
|
|
|
Purchases of marketable securities
|
|
(48,397)
|
|
|
(37,192)
|
Proceeds from maturities of marketable securities
|
|
5,556
|
|
|
3,460
|
Proceeds from sales of marketable securities
|
|
30,302
|
|
|
23,002
|
Payments made in connection with business acquisitions, net
|
|
(525)
|
|
|
(284)
|
Payments for acquisition of property, plant and equipment
|
|
(1,985)
|
|
|
(2,317)
|
Payments for acquisition of intangible assets
|
|
(59)
|
|
|
(138)
|
Other
|
|
5
|
|
|
(52)
|
Cash used in investing activities
|
|
(15,103)
|
|
|
(13,521)
|
|
|
|
|
|
|
Financing activities:
|
|
|
|
|
|
Proceeds from issuance of common stock
|
|
134
|
|
|
76
|
Excess tax benefits from equity awards
|
|
280
|
|
|
404
|
Taxes paid related to net share settlement of equity awards
|
|
(365)
|
|
|
(534)
|
Dividends and dividend equivalents paid
|
|
(2,769)
|
|
|
(2,493)
|
Repurchase of common stock
|
|
(5,029)
|
|
|
(1,950)
|
Cash used in financing activities
|
|
(7,749)
|
|
|
(4,497)
|
|
|
|
|
|
|
Increase/(decrease) in cash and cash equivalents
|
|
(182)
|
|
|
5,408
|
Cash and cash equivalents, end of the period
|
|
$
|
14,077
|
|
$
|
16,154
|
|
|
|
|
|
|
Supplemental cash flow disclosure:
|
|
|
|
|
|
Cash paid for income taxes, net
|
|
$
|
3,387
|
|
$
|
1,890
|
Cash paid for interest
|
|
$
|
161
|
|
$
|
0
|
|
|
|
|
|
|
|
Apple Inc.
|
Q1 2014 Unaudited Summary Data
|
(Units in thousands, Revenue in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q1'14
|
|
Q4'13
|
|
Q1'13
|
|
Sequential Change
|
|
Year/Year Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Segments
|
|
|
|
Revenue
|
|
|
|
Revenue
|
|
|
|
Revenue
|
|
|
|
Revenue
|
|
|
|
Revenue
|
|
Americas
|
|
|
|
$20,098
|
|
|
|
$13,941
|
|
|
|
$20,341
|
|
|
|
44%
|
|
|
|
- 1%
|
|
Europe
|
|
|
|
13,073
|
|
|
|
8,005
|
|
|
|
12,464
|
|
|
|
63%
|
|
|
|
5%
|
|
Greater China (a)
|
|
|
|
8,844
|
|
|
|
5,733
|
|
|
|
6,830
|
|
|
|
54%
|
|
|
|
29%
|
|
Japan
|
|
|
|
4,948
|
|
|
|
3,341
|
|
|
|
4,443
|
|
|
|
48%
|
|
|
|
11%
|
|
Rest of Asia Pacific
|
|
|
|
3,633
|
|
|
|
1,980
|
|
|
|
3,993
|
|
|
|
83%
|
|
|
|
- 9%
|
|
Retail
|
|
|
|
6,998
|
|
|
|
4,472
|
|
|
|
6,441
|
|
|
|
56%
|
|
|
|
9%
|
Total Apple
|
|
|
|
$57,594
|
|
|
|
$37,472
|
|
|
|
$54,512
|
|
|
|
54%
|
|
|
|
6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q1'14
|
|
Q4'13
|
|
Q1'13
|
|
Sequential Change
|
|
Year/Year Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product Summary
|
|
Units
|
|
Revenue
|
|
Units
|
|
Revenue
|
|
Units
|
|
Revenue
|
|
Units
|
|
Revenue
|
|
Units
|
|
Revenue
|
|
iPhone (b)
|
|
51,025
|
|
$32,498
|
|
33,797
|
|
$19,510
|
|
47,789
|
|
$30,660
|
|
51%
|
|
67%
|
|
7%
|
|
6%
|
|
iPad (b)
|
|
26,035
|
|
11,468
|
|
14,079
|
|
6,186
|
|
22,860
|
|
10,674
|
|
85%
|
|
85%
|
|
14%
|
|
7%
|
|
Mac (b)
|
|
4,837
|
|
6,395
|
|
4,574
|
|
5,624
|
|
4,061
|
|
5,519
|
|
6%
|
|
14%
|
|
19%
|
|
16%
|
|
iPod (b)
|
|
6,049
|
|
973
|
|
3,498
|
|
573
|
|
12,679
|
|
2,143
|
|
73%
|
|
70%
|
|
- 52%
|
|
- 55%
|
|
iTunes/Software/Services (c)
|
|
|
|
4,397
|
|
|
|
4,260
|
|
|
|
3,687
|
|
|
|
3%
|
|
|
|
19%
|
|
Accessories (d)
|
|
|
|
1,863
|
|
|
|
1,319
|
|
|
|
1,829
|
|
|
|
41%
|
|
|
|
2%
|
Total Apple
|
|
|
|
$57,594
|
|
|
|
$37,472
|
|
|
|
$54,512
|
|
|
|
54%
|
|
|
|
6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
Greater China includes China, Hong Kong and Taiwan.
|
(b)
|
|
Includes deferrals and amortization of related non-software
services and software upgrade rights.
|
(c)
|
|
Includes revenue from sales on the iTunes Store, the App Store,
the Mac App Store, and the iBooks Store, and revenue from sales of
AppleCare, licensing and other services.
|
(d)
|
|
Includes sales of hardware peripherals and Apple-branded and
third-party accessories for iPhone, iPad, Mac and iPod.
|
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Copyright Business Wire 2014