Apple: Key Extracts From Earnings Conf Call

Apple (AAPL) blew away all forecasts yesterday when they announced earnings results for the September quarter. Here are the key extracts from the subsequent conference call:

Headline Numbers

  • $8.5 b in profit
  • $42.12 b in revenue
  • 39.27 mio iPhones (+16% YoY)
  • 5.5 mio Macs. Strongest Mac sales ever. Highest market share since 1995. Emerging markets grew 46% YoY. Mostly MacBook Pro and MacBook Air
  • 12.3 mio iPads
  • $155.2 b in cash
  • iPhone ASP $603. 
  • Strongest revenue growth in 7 quarters
  • Returned $17 b to investors during Sept. quarter alone, $45 b over the past year

On the iPhone

  • IP6/6 Plus demand was strong, but 5S/C remain popular at lower price points
  • Underlying demand "far outstripping supply". Selling everything they can produce. Don't know when supply will catch up.
  • Cook said that "it's clear" that Apple is "not nearly balanced" when it comes to supply and demand. "We're not even on the same planet."
  • "It's very unusual to see every country having a marked improvement over the previous year, and that's what we're seeing on iPhones," Cook said.
  • "We do not envision, as of today, being able to achieve the extra inventory in the channel that we believe is needed," he said. "It's hard to tell when you're at a point when you're selling everything you're making," Cook said of assessing demand. "It's a good problem to have."
  • iPhone supply below target range of 4-6 weeks of channel inventory. Will begin targeting channel inventory in the 5-7 week range to make up.
  • Sales in US grew 17% YoY, while Western Europe was up 20%
  • Even stronger growth in Latin America and Middle East. Sales more than doubled in Eastern Europe.
  • Apple had a 69% share of the U.S. commercial smartphone market. 
  • Maestri cited a survey that said 75% of enterprises planning to buy in the September quarter will choose iPhone.
  • Cook still sees a large opportunity for people buying their first iPhone, and he thinks that opportunity increases with the iPhone 6 and 6 Plus. He also expects a high number of upgrades from previous iPhone owners.
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