10-QPeriod: Q1 FY2013

Apple Inc. Quarterly Report for Q1 Ended Dec 29, 2012

Filed January 24, 2013For Securities:AAPL

Summary

Apple Inc.'s Q1 2013 filing (ended December 29, 2012) demonstrates robust top-line growth driven by strong iPhone and iPad sales, even amidst a challenging macroeconomic environment. Net sales increased by 18% year-over-year, reaching $54.5 billion, primarily fueled by a significant jump in iPhone unit sales and the successful launch of the iPad mini and fourth-generation iPad. The company also saw continued growth in its services segment, including the App Store. Despite impressive revenue growth, gross margin experienced a notable decline to 38.6% from 44.7% in the prior year. This was attributed to the introduction of new products with higher cost structures (like the iPad mini), price reductions on existing products, and product transition costs. Research and development expenses also saw an increase, reflecting Apple's commitment to innovation. The company maintained a strong liquidity position, with over $137 billion in cash, cash equivalents, and marketable securities, and announced plans for significant quarterly dividend payments and a substantial stock repurchase program.

Financial Highlights

51 data points
Beta

Revenue

$54.51B

38.6% Gross Margin

Net Income

$13.08B

24.0% Net Margin

EPS (Diluted)

$0.49

Total Assets

$196.09B

Cash & Equivalents

$16.15B

Free Cash Flow

$23.43B

Financial Statements
Beta
Revenue$54.51B
Cost of Revenue$33.45B
Gross Profit$21.06B
R&D Expenses$1.01B
SG&A Expenses$2.84B
Operating Expenses$3.85B
Operating Income$17.21B
Interest Expense$0
Net Income$13.08B
EPS (Basic)$0.50
EPS (Diluted)$0.49
Shares Outstanding (Basic)26.29B
Shares Outstanding (Diluted)26.52B

Key Highlights

  • 1Net sales grew 18% year-over-year to $54.5 billion, driven by strong demand for iPhone and iPad.
  • 2iPhone sales increased 28% to $30.7 billion, accounting for 56% of total net sales.
  • 3iPad sales increased 22% to $10.7 billion, with unit sales up 48%, boosted by the launch of iPad mini.
  • 4Gross margin decreased to 38.6% from 44.7% in the prior year, due to new product costs and pricing pressures.
  • 5R&D expenses increased by 33% to $1.0 billion, signaling continued investment in innovation.
  • 6The company reported a substantial cash and marketable securities balance of $137.1 billion.
  • 7Apple initiated a quarterly dividend of $2.65 per share and announced a $10 billion stock repurchase program starting in 2013.

Frequently Asked Questions

iPhone sales surged by 28% to $30.7 billion, with unit sales up 29%. iPad sales rose by 22% to $10.7 billion, driven by a 48% increase in unit sales, including the newly launched iPad mini. However, Mac sales decreased by 16% and iPod sales by 15%.

The gross margin percentage dropped to 38.6% from 44.7% year-over-year. This decline was primarily attributed to the introduction of new products with higher cost structures and lower initial margins (like the iPad mini), price reductions on certain existing products, and costs associated with product transitions.

Apple maintained a very strong liquidity position, with cash, cash equivalents, and marketable securities totaling $137.1 billion as of December 29, 2012. This represents an increase of $15.9 billion from the previous quarter, largely due to strong operating cash flow.

Apple announced plans to initiate a quarterly cash dividend of $2.65 per share. Additionally, the company authorized a program to repurchase up to $10 billion of its common stock, set to begin in 2013 and continue through 2015, primarily to offset dilution from equity grants.