Apple Inc. Quarterly Report for Q1 Ended Dec 26, 2009

Summary

Apple Inc.'s Form 10-Q filing for the quarter ended December 26, 2009, reveals a period of robust financial performance driven by strong sales across its product lines, particularly the iPhone. The company reported a significant increase in net sales and net income compared to the prior year's quarter, demonstrating its continued growth trajectory. This period also marks the retrospective adoption of new accounting principles for revenue recognition, impacting prior period comparability but aiming to provide a clearer picture of economic performance, especially for products like the iPhone and Apple TV. Key financial highlights include substantial revenue growth, driven by a near doubling of iPhone sales, significant increases in Mac sales, and continued performance from iPods and the iTunes Store. The company maintained healthy gross margins, though it anticipates a decrease in the near future due to product mix and component cost pressures. Apple's balance sheet remains strong, with a substantial increase in cash, cash equivalents, and marketable securities, providing ample liquidity and financial flexibility for future investments and operations.

Key Highlights

• 1Net sales surged by 32% year-over-year to $15.68 billion.
• 2Net income increased by 50% to $3.38 billion, with diluted EPS growing to $3.67 from $2.50.
• 3iPhone sales more than doubled, reaching $5.58 billion and constituting 36% of total net sales.
• 4Mac sales grew 25% to $4.45 billion, with desktop sales up 62% and portable sales up 9%.
• 5Gross margin percentage improved to 40.9% from 37.9% year-over-year, driven by cost efficiencies and product mix.
• 6The company adopted new accounting principles retrospectively for revenue recognition, impacting prior periods' financial statements.
• 7Total cash, cash equivalents, and marketable securities increased significantly to $39.82 billion, providing substantial liquidity.

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