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Apple’s Q3 2013 Conference Call to Investment Bankers ~ Highlights, July 23, 2013, 5pm ๐ŸŽ๐ŸŽ๐ŸŽ๐ŸŽ๐ŸŽ๐ŸŽ๐ŸŽ

July 23, 2013

Apple’s Q3 2013 Conference Call to Investment Bankers, Highlights, July 23, 2013, 5pm. With continued iPhone growth and a particularly strong performance from its iTunes and services businesses, Apple posted a slight increase in revenues in the June quarter, though lower margins led to a 20 percent slide in profit. Following the company’s earnings release, Apple executives took part in a conference call to discuss the quarter, and notes of interest follow, assembled by Appleinsider.

Data released this week found that the iPhone 5 accounts for just over half of all iPhone sales, while the iPhone 4S is responsible for 30% of smartphones Apple sells. The share of the iPhone 5 peaked after its launch last October, according to Consumer Intelligence Research Partners, when the latest-generation model accounted for 68% of all iPhones sold.

In the just-concluded June quarter, iPhone sales in Japan were particularly strong, up 66% year over year. The iPhone is the top selling smartphone in Japan, according to the latest data from IDC, Apple Chief Financial Officer Peter Oppenheimer noted.

Also singled out as having strong sales were the U.S., U.K., Brazil, Russia, India, and Thailand, representing both developed and emerging markets. Apple was either the No. 1 or No. 2 smartphone manufacturer in North America, Western Europe, Russia, Singapore, and Hong Kong.

Among major hardware, Apple’s only growth came from the iPhone, which saw a 20 percent jump to 31.2 million units. iTunes, software and services were particularly strong in the June quarter, growing 25 percent. iPad shipments had a tough comparison to Q3 2012, when Apple launched the third-generation iPad late in the preceding quarter.

Apple’s iPhone business. The iPhone was Apple’s a major growth product for Apple during the quarter, posting a 20% increase in shipments from the same period in 2012 to 31.2 million units, and setting a new record for the quarter. Increase of 5.2 million.
โ€ข iPhone sell-through of about 31.8 million units.
โ€ข Revenue from the iPhone was also up 15% year over year.
โ€ข Developed and emerging markets โ€” US, UK, Japan, Brazil, Russia, India, Thailand โ€” saw strong sales.
โ€ข iPhone 5 most popular so far, but solid sales for 4 and 4S.
โ€ข Ended quarter with 11 million in channel inventory.
โ€ข iPhone sales strong in Japan, top-selling smartphone in Japan.
โ€ข Apple No. 1 or No. 2 smartphone manufacturer in North America, Western Europe, Russia, Turkey, Singapore, Hong Kong.
โ€ข 95% loyalty rate among iPhone owners.
โ€ข iPhone top spot in cust.sat. from JD Power, South Korea.
โ€ข American Airlines, Cisco, General Electric, SAP deployed more than 20,000 iPhones across their enterprises.

Apple’s iPad business. iPad shipments saw their first-ever year over year decrease, down 14% to 14.6 million units. Revenues for the iPad lineup were off even more, sliding 27% due to the late 2012 introduction of the lower-margin iPad mini.
โ€ข Exited quarter with 4.1M units of iPad channel inventory.
โ€ข iPad number one in 2013 tablet satisfaction survey.
โ€ข Cites Chitika study showing iPad at highest level of usage this year with 84.4% web share in North America.

Apple’s Mac business. Mac shipments slid 7 percent during Apple’s third fiscal quarter of 2013 to 3.8 million. Revenue wasn’t hit as hard, though, easing just 1 percent.
โ€ข 3.8 million Macs, 7 percent decline YoY but higher sales than Apple’s estimates.
โ€ข Global computer market contracted 11 percent in same time, so Macs gained share.
โ€ข Apple pleased with response to new MacBook Airs
โ€ข Developer preview of OS X Mavericks will bring more than 200 new features.
โ€ข "We’re extremely pleased to have received" authorization to roll out 660,000 iPads to Los Angeles students.

Apple’s iTunes and App Store businesses. Apple saw huge growth in its iTunes, software and services businesses, surging 25 percent year over year to $3.9 billion in revenue. iTunes users have downloaded more than 1 billion tv episodes and 390 million movies from iTunes
โ€ข Developers have now created more than 900K apps, including 375K for iPad
โ€ข Developers have made more than $11 billion in sales, half of which in the last four quarters
โ€ข More than 900 billion iMessages
โ€ข Received more than 8 trillion push notifications
โ€ข Apple’s retail business and regional sales

Retail sales were flat year over year. The company saw the biggest regional growth in Japan, where revenue was up 27 percent from the same quarter in 2012. Sales were also up 12 percent in the Americas, while the rest of the world saw year over year decreases. Revenue for quarter $4.1 billion. Strong growth in iPhone sales. Most successful macBook Air launch to date.
โ€ข Ended quarter with 408 stores, 156 outside the United STates.
โ€ข Will open 9 new stores in next quarter.
โ€ข 23 more such relocations in Fiscal ’13.
โ€ข Retail segment income was $670 million.
โ€ข On Average about 15,000 visitors per store, each week.

Apple’s iPod business. iPod shipments were down a dismal 32% year over year to 4.6 million units. The iPod number wasn’t even mentioned in the text of Apple’s press release, an uncharacteristic decision. Revenue from iPod sales was also down 31% year over year.

Apple’s next (Q4 2013) fiscal quarter.
โ€ข Apple’s range of guidance for its fiscal 2013 fourth quarter calls for:
โ€ข Revenue between $34 billion and $37 billion
โ€ข Gross margin between 36% and 37%
โ€ข Operating expenses between $3.9 billion and $3.95 billion
โ€ข Other income/(expense) of $200 million
โ€ข Tax rate of 26.5%


This Was the Apple Stock value at the close of trading on 7/23/2013//4pm.


Apple’s Q3 2013 Financial Results Press Release:
http://images.apple.com/pr/pdf/q3fy13datasum.pdf

CUPERTINO, Californiaโ€”July 23, 2013โ€”Appleยฎ today announced financial results for its fiscal 2013 third quarter ended June 29, 2013. The Company posted quarterly revenue of $35.3 billion and quarterly net profit of $6.9 billion, or $7.47 per diluted share. These results compare to revenue of $35 billion and net profit of $8.8 billion, or $9.32 per diluted share, in the year-ago quarter. Gross margin was 36.9 percent compared to 42.8 percent in the year-ago quarter. International sales accounted for 57 percent of the quarterโ€™s revenue.

The Company sold 31.2 million iPhones, a record for the June quarter, compared to 26 million in the year-ago quarter. Apple also sold 14.6 million iPads during the quarter, compared to 17 million in the year-ago quarter. The Company sold 3.8 million Macs, compared to 4 million in the year-ago quarter.

Appleโ€™s Board of Directors has declared a cash dividend of $3.05 per share of the Companyโ€™s common stock. The dividend is payable on August 15, 2013, to shareholders of record as of the close of business on August 12, 2013.

โ€œWe are especially proud of our record June quarter iPhone sales of over 31 million and the strong growth in revenue from iTunes, Software and Services,โ€ said Tim Cook, Appleโ€™s CEO. โ€œWe are really excited about the upcoming releases of iOS 7 and OS X Mavericks, and we are laser-focused and working hard on some amazing new products that we will introduce in the fall and across 2014.โ€

โ€œWe generated $7.8 billion in cash flow from operations during the quarter and are pleased to have returned $18.8 billion in cash to shareholders through dividends and share repurchases,โ€ said Peter Oppenheimer, Appleโ€™s CFO.

Apple is providing the following guidance for its fiscal 2013 fourth quarter:

โ€ข Revenue between $34 billion and $37 billion
โ€ข Gross margin between 36 percent and 37 percent
โ€ข Operating expenses between $3.9 billion and $3.95 billion
โ€ข Other income/(expense) of $200 million
โ€ข Tax rate of 26.5%


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3 Comments
  1. I really like reading through a post that can make men and women think.
    Also, many thanks for permitting me to comment!

    • My pleasure. We are gaining about 1000 new readers every week. If you have any topic suggestion be free to make comment.

      JimW

    • When in doubt Follow the Money. For quality mobile SmartPhone devices, not the cheepie ones, in the USA the iPhone is out selling any other SmartPhone by more than two-to-one. Why it this… as a Faculty person at a major University in Florida, focused on teaching and operability matters, the iPhone is by far the easiest device to use, coupled with an incredible Ecosystem, for those that want Services, Support, Apps, Books, Music, Movies, Great iOS operating system that everyone upgrades to, 95% Apple retention rate, whereas 26% of Android users are defecting to Apple, there are reasons for all this… the iPhone, and the iPad are simply Better. Not cheeper, better. Sometimes its worth it, to pay up a bit and get the best. This is spoken from a Loyal and Former BlackBerry customer, defecting to iPhone4 in July 2010. JimW

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