10-QPeriod: Q2 FY2009

Apple Inc. Quarterly Report for Q2 Ended Mar 28, 2009

Filed April 23, 2009For Securities:AAPL

Summary

Apple Inc. reported strong financial results for the quarter ending March 28, 2009, demonstrating resilience and growth despite the prevailing economic climate. Net sales increased by 9% year-over-year, reaching $8.16 billion, driven significantly by a remarkable 302% surge in iPhone revenue, underscoring its growing importance as a key revenue driver. This robust top-line performance translated into a healthy increase in net income, which rose to $1.205 billion from $1.045 billion in the prior year period, leading to a diluted earnings per share of $1.33. The company's operational efficiency was also evident in its improved gross margin, which increased to 36.4% from 32.9% in the prior year, reflecting effective cost management and favorable component costs. While Mac sales experienced a decline in net sales and unit volume, this was more than offset by the stellar performance of the iPhone and continued strength in iTunes Store sales. Apple's balance sheet remains exceptionally strong, with a substantial increase in cash, cash equivalents, and marketable securities to $28.9 billion, providing significant financial flexibility.

Financial Highlights

24 data points
Beta

Revenue

$9.08B

39.9% Gross Margin

Net Income

$1.62B

17.8% Net Margin

EPS (Diluted)

$0.06

Cash & Equivalents

$4.47B

Free Cash Flow

$841.00M

Financial Statements
Beta
Revenue$9.08B
Cost of Revenue$5.46B
Gross Profit$3.63B
R&D Expenses$319.00M
SG&A Expenses$985.00M
Operating Expenses$1.30B
Operating Income$2.32B
Net Income$1.62B
EPS (Basic)$0.07
EPS (Diluted)$0.06
Shares Outstanding (Basic)24.95B
Shares Outstanding (Diluted)25.28B

Key Highlights

  • 1Net sales increased by 9% year-over-year to $8.16 billion.
  • 2Net income rose to $1.205 billion, a 15% increase from the prior year's $1.045 billion.
  • 3Diluted earnings per share grew to $1.33, up from $1.16 in the comparable prior year period.
  • 4Gross margin improved significantly to 36.4% from 32.9% in the prior year quarter.
  • 5iPhone revenue saw a dramatic increase of 302% year-over-year, highlighting its growing market impact.
  • 6Total cash, cash equivalents, and marketable securities increased to $28.9 billion, demonstrating strong liquidity.
  • 7Mac sales experienced a decline in net sales (-16%) and units (-3%), indicating a challenging segment during this period.

Frequently Asked Questions

The primary driver of Apple's revenue growth was the exceptional performance of the iPhone, which saw a remarkable 302% increase in revenue year-over-year. This was complemented by strong sales from the iTunes Store and other music-related products and services.

Mac sales, both desktops and portables, experienced a decline in net sales and unit volume during this quarter compared to the prior year. This was a contrast to the significant growth seen in iPhone and other revenue streams, indicating a shift in growth drivers.

Apple's financial position remains very strong. As of March 28, 2009, the company reported $28.9 billion in cash, cash equivalents, and marketable securities, an increase of $4.4 billion from September 27, 2008. This increase was primarily driven by strong operating cash flow.

Yes, Apple reported a significant improvement in its gross margin percentage, which increased to 36.4% from 32.9% in the prior year's comparable quarter. This was attributed to lower commodity and product costs, partially offset by price reductions.