10-QPeriod: Q3 FY2010

Apple Inc. Quarterly Report for Q3 Ended Jun 26, 2010

Filed July 21, 2010For Securities:AAPL

Summary

Apple Inc.'s third quarter of fiscal year 2010 (ending June 26, 2010) demonstrated robust growth, with total net sales reaching $15.7 billion, a significant 61% increase year-over-year. This strong performance was primarily driven by the remarkable success of the iPhone, which saw a 74% increase in net sales and contributed 34% of total revenue for the quarter. The newly launched iPad also made a substantial impact, generating $2.2 billion in net sales and accounting for 14% of total revenue in its debut quarter. Profitability also saw substantial improvement, with net income rising to $3.25 billion, a nearly 78% increase compared to the prior year, leading to diluted earnings per share of $3.51. The company's balance sheet remained strong, with cash, cash equivalents, and marketable securities growing to $45.8 billion. This quarter highlights Apple's continued innovation and market leadership, particularly in the mobile device sector, supported by strong sales across its entire product portfolio.

Financial Highlights

46 data points
Beta

Revenue

$15.70B

39.1% Gross Margin

Net Income

$3.25B

20.7% Net Margin

EPS (Diluted)

$0.13

Total Assets

$64.72B

Cash & Equivalents

$9.71B

Free Cash Flow

$4.80B

Financial Statements
Beta
Revenue$15.70B
Cost of Revenue$9.56B
Gross Profit$6.14B
R&D Expenses$464.00M
SG&A Expenses$1.44B
Operating Expenses$1.90B
Operating Income$4.23B
Net Income$3.25B
EPS (Basic)$0.13
EPS (Diluted)$0.13
Shares Outstanding (Basic)25.54B
Shares Outstanding (Diluted)25.97B

Key Highlights

  • 1Total net sales surged by 61% year-over-year to $15.7 billion, driven by strong product demand.
  • 2iPhone sales grew 74% year-over-year, becoming a dominant revenue driver at 34% of total net sales.
  • 3The newly launched iPad contributed $2.2 billion in net sales, representing 14% of total revenue in its first quarter.
  • 4Net income increased by nearly 78% to $3.25 billion, reflecting significant operational leverage.
  • 5Diluted earnings per share (EPS) rose to $3.51, up from $2.01 in the prior year's comparable quarter.
  • 6The company maintained a strong liquidity position with $45.8 billion in cash, cash equivalents, and marketable securities.

Frequently Asked Questions

iPhone sales were exceptionally strong, with net sales increasing by 74% year-over-year to $5.3 billion. This performance represented 34% of Apple's total net sales for the quarter, highlighting its critical role in the company's revenue generation. iPhone unit sales also saw a significant increase of 61%.

The iPad, launched in April 2010, made a significant contribution in its first quarter, generating $2.2 billion in net sales. This represented 14% of Apple's total net sales for the quarter, demonstrating rapid market acceptance and strong initial demand.

Apple's profitability significantly improved, with net income rising by nearly 78% to $3.25 billion compared to the same quarter last year. This strong profit growth translated into a substantial increase in diluted earnings per share, which grew to $3.51 from $2.01 in the prior year's comparable quarter.

Apple maintained a very strong liquidity position. As of June 26, 2010, the company reported cash, cash equivalents, and marketable securities totaling $45.8 billion, an increase of $11.8 billion from the previous fiscal year-end. This robust cash balance provides significant financial flexibility.