10-QPeriod: Q2 FY2012

Apple Inc. Quarterly Report for Q2 Ended Mar 31, 2012

Filed April 25, 2012For Securities:AAPL

Summary

Apple Inc.'s Form 10-Q for the quarter ended March 31, 2012, demonstrates robust financial performance driven by exceptional sales growth across its product lines, particularly the iPhone and iPad. The company reported a significant increase in net sales, up 59% year-over-year to $39.2 billion, and a substantial rise in net income to $11.6 billion. This growth was fueled by strong demand in all geographic segments, with Asia-Pacific showing particularly impressive growth at 114%. The company also saw a healthy expansion in its gross margin, reaching 47.4%, attributed to a favorable product mix and lower costs. Key financial highlights include a massive increase in cash, cash equivalents, and marketable securities to $110.2 billion, underscoring Apple's strong financial position. The company also announced its intention to initiate quarterly dividends of $2.65 per share starting in Q4 2012 and a $10 billion stock repurchase program starting in 2013, signaling a commitment to returning capital to shareholders. Despite a continued increase in R&D and SG&A expenses to support growth and innovation, Apple's operational efficiency and strong sales continue to drive impressive profitability.

Financial Highlights

50 data points
Beta

Revenue

$39.19B

47.4% Gross Margin

Net Income

$11.62B

29.7% Net Margin

EPS (Diluted)

$0.44

Total Assets

$150.93B

Cash & Equivalents

$10.12B

Free Cash Flow

$13.98B

Financial Statements
Beta
Revenue$39.19B
Cost of Revenue$20.62B
Gross Profit$18.56B
R&D Expenses$841.00M
SG&A Expenses$2.34B
Operating Expenses$3.18B
Operating Income$15.38B
Net Income$11.62B
EPS (Basic)$0.44
EPS (Diluted)$0.44
Shares Outstanding (Basic)26.14B
Shares Outstanding (Diluted)26.46B

Key Highlights

  • 1Net sales surged 59% to $39.19 billion for the quarter, with iPhone and iPad sales showing remarkable year-over-year growth of 85% and 132% respectively.
  • 2Net income grew significantly to $11.62 billion, a substantial increase from $5.99 billion in the prior year's comparable quarter.
  • 3Gross margin percentage improved to 47.4% from 41.4% in the prior year's quarter, driven by product mix and cost efficiencies.
  • 4The company's cash, cash equivalents, and marketable securities balance stood at a robust $110.18 billion as of March 31, 2012.
  • 5Apple announced plans to initiate a quarterly dividend of $2.65 per share starting in the fourth quarter of 2012 and a $10 billion share repurchase program to begin in 2013.
  • 6Research and Development (R&D) expenses increased by 45% to $841 million, reflecting continued investment in innovation.
  • 7Asia-Pacific region showed exceptional net sales growth of 114% year-over-year, highlighting expanding market penetration.

Frequently Asked Questions

The primary revenue drivers were the iPhone and iPad. iPhone sales saw an 85% year-over-year increase to $22.7 billion, and iPad sales grew by 132% to $6.6 billion. This strong performance was supported by new product launches and expanded distribution channels.

Apple's profitability significantly improved. Net income rose to $11.62 billion from $5.99 billion in the same quarter last year. The gross margin percentage also expanded to 47.4% from 41.4%, indicating better cost management and a favorable product mix.

As of March 31, 2012, Apple held $110.2 billion in cash, cash equivalents, and marketable securities. The company announced its intention to initiate a quarterly dividend of $2.65 per share starting in Q4 2012 and a $10 billion share repurchase program commencing in 2013, demonstrating a commitment to returning capital to shareholders.

Research and Development (R&D) expenses increased by 45% to $841 million compared to the prior year's quarter. While this reflects a significant investment in future innovation, it remained consistent at 2% of net sales, indicating efficient management of R&D spend relative to revenue growth.