CUPERTINO, Calif.--(BUSINESS WIRE)--Apple® today announced financial results for its fiscal 2014 first quarter ended December 28, 2013. The Company posted record quarterly revenue of $57.6 billion and quarterly net profit of $13.1 billion, or $14.50 per diluted share. These results compare to revenue of $54.5 billion and net profit of $13.1 billion, or $13.81 per diluted share, in the year-ago quarter. Gross margin was 37.9 percent compared to 38.6 percent in the year-ago quarter. International sales accounted for 63 percent of the quarter’s revenue.
The Company sold 51 million iPhones, an all-time quarterly record, compared to 47.8 million in the year-ago quarter. Apple also sold 26 million iPads during the quarter, also an all-time quarterly record, compared to 22.9 million in the year-ago quarter. The Company sold 4.8 million Macs, compared to 4.1 million in the year-ago quarter.
Apple’s Board of Directors has declared a cash dividend of $3.05 per share of the Company’s common stock. The dividend is payable on February 13, 2014, to shareholders of record as of the close of business on February 10, 2014.
“We are really happy with our record iPhone and iPad sales, the strong performance of our Mac products and the continued growth of iTunes, Software and Services,” said Tim Cook, Apple’s CEO. “We love having the most satisfied, loyal and engaged customers, and are continuing to invest heavily in our future to make their experiences with our products and services even better.”
“We generated $22.7 billion in cash flow from operations and returned an additional $7.7 billion in cash to shareholders through dividends and share repurchases during the December quarter, bringing cumulative payments under our capital return program to over $43 billion,” said Peter Oppenheimer, Apple’s CFO.
Apple is providing the following guidance for its fiscal 2014 second quarter:
• revenue between $42 billion and $44 billion
• gross margin between 37 percent and 38 percent
• operating expenses between $4.3 billion and $4.4 billion
• other income/(expense) of $200 million
• tax rate of 26.2 percent
Apple will provide live streaming of its Q1 2014 financial results conference call beginning at 2:00 p.m. PST on January 27, 2014 at www.apple.com/quicktime/qtv/earningsq114. This webcast will also be available for replay for approximately two weeks thereafter.
This press release contains forward-looking statements including without limitation those about the Company’s estimated revenue, gross margin, operating expenses, other income/(expense), and tax rate. These statements involve risks and uncertainties, and actual results may differ. Risks and uncertainties include without limitation the effect of competitive and economic factors, and the Company’s reaction to those factors, on consumer and business buying decisions with respect to the Company’s products; continued competitive pressures in the marketplace; the ability of the Company to deliver to the marketplace and stimulate customer demand for new programs, products, and technological innovations on a timely basis; the effect that product introductions and transitions, changes in product pricing or mix, and/or increases in component costs could have on the Company’s gross margin; the inventory risk associated with the Company’s need to order or commit to order product components in advance of customer orders; the continued availability on acceptable terms, or at all, of certain components and services essential to the Company’s business currently obtained by the Company from sole or limited sources; the effect that the Company’s dependency on manufacturing and logistics services provided by third parties may have on the quality, quantity or cost of products manufactured or services rendered; risks associated with the Company’s international operations; the Company’s reliance on third-party intellectual property and digital content; the potential impact of a finding that the Company has infringed on the intellectual property rights of others; the Company’s dependency on the performance of distributors, carriers and other resellers of the Company’s products; the effect that product and service quality problems could have on the Company’s sales and operating profits; the continued service and availability of key executives and employees; war, terrorism, public health issues, natural disasters, and other circumstances that could disrupt supply, delivery, or demand of products; and unfavorable results of other legal proceedings. More information on potential factors that could affect the Company’s financial results is included from time to time in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s public reports filed with the SEC, including the Company’s Form 10-K for the fiscal year ended September 28, 2013 and its Form 10-Q for the quarter ended December 28, 2013 to be filed with the SEC. The Company assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates.
Apple designs Macs, the best personal computers in the world, along with OS X, iLife, iWork and professional software. Apple leads the digital music revolution with its iPods and iTunes online store. Apple has reinvented the mobile phone with its revolutionary iPhone and App Store, and is defining the future of mobile media and computing devices with iPad.
NOTE TO EDITORS: For additional information visit Apple’s PR website (www.apple.com/pr), or call Apple’s Media Helpline at (408) 974-2042.
© 2014 Apple Inc. All rights reserved. Apple, the Apple logo, Mac, Mac OS and Macintosh are trademarks of Apple. Other company and product names may be trademarks of their respective owners.
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Apple Inc. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except number of shares which are reflected in thousands and per share amounts) |
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| Three Months Ended | ||||||
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December 28, |
December 29, |
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| Net sales | $ | 57,594 | $ | 54,512 | ||
| Cost of sales (1) | 35,748 | 33,452 | ||||
| Gross margin | 21,846 | 21,060 | ||||
| Operating expenses: |
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| Research and development (1) | 1,330 | 1,010 | ||||
| Selling, general and administrative (1) | 3,053 | 2,840 | ||||
| Total operating expenses | 4,383 | 3,850 | ||||
| Operating income | 17,463 | 17,210 | ||||
| Other income/(expense), net | 246 | 462 | ||||
| Income before provision for income taxes | 17,709 | 17,672 | ||||
| Provision for income taxes | 4,637 | 4,594 | ||||
| Net income | $ | 13,072 | $ | 13,078 | ||
| Earnings per share: | ||||||
| Basic | $ | 14.59 | $ | 13.93 | ||
| Diluted | $ | 14.50 | $ | 13.81 | ||
| Shares used in computing earnings per share: | ||||||
| Basic | 896,072 | 938,916 | ||||
| Diluted | 901,452 | 947,217 | ||||
| Cash dividends declared per common share | $ | 3.05 | $ | 2.65 | ||
| (1) Includes share-based compensation expense as follows: | ||||||
| Cost of sales | $ | 109 | $ | 85 | ||
| Research and development | $ | 289 | $ | 224 | ||
| Selling, general and administrative | $ | 283 | $ | 236 | ||
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Apple Inc. UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (In millions, except number of shares which are reflected in thousands) |
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December 28, |
September 28, |
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| ASSETS: | ||||||
| Current assets: | ||||||
| Cash and cash equivalents | $ | 14,077 | $ | 14,259 | ||
| Short-term marketable securities | 26,634 | 26,287 | ||||
| Accounts receivable, less allowances of $94 and $99, respectively | 14,200 | 13,102 | ||||
| Inventories | 2,122 | 1,764 | ||||
| Deferred tax assets | 3,742 | 3,453 | ||||
| Vendor non-trade receivables | 10,998 | 7,539 | ||||
| Other current assets | 8,574 | 6,882 | ||||
| Total current assets | 80,347 | 73,286 | ||||
| Long-term marketable securities | 118,131 | 106,215 | ||||
| Property, plant and equipment, net | 15,488 | 16,597 | ||||
| Goodwill | 2,022 | 1,577 | ||||
| Acquired intangible assets, net | 4,105 | 4,179 | ||||
| Other assets | 5,091 | 5,146 | ||||
| Total assets | $ | 225,184 | $ | 207,000 | ||
| LIABILITIES AND SHAREHOLDERS’ EQUITY: | ||||||
| Current liabilities: | ||||||
| Accounts payable | $ | 29,588 | $ | 22,367 | ||
| Accrued expenses | 15,824 | 13,856 | ||||
| Deferred revenue | 8,357 | 7,435 | ||||
| Total current liabilities | 53,769 | 43,658 | ||||
| Deferred revenue – non-current | 3,071 | 2,625 | ||||
| Long-term debt | 16,961 | 16,960 | ||||
| Other non-current liabilities | 21,699 | 20,208 | ||||
| Total liabilities | 95,500 | 83,451 | ||||
| Commitments and contingencies | ||||||
| Shareholders' equity: | ||||||
| Common stock, no par value; 1,800,000 shares authorized; 892,447 and 899,213 shares issued and outstanding, respectively | 20,559 | 19,764 | ||||
| Retained earnings | 109,431 | 104,256 | ||||
| Accumulated other comprehensive income/(loss) | (306) | (471) | ||||
| Total shareholders' equity | 129,684 | 123,549 | ||||
| Total liabilities and shareholders' equity | $ | 225,184 | $ | 207,000 | ||
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Apple Inc. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) |
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| Three Months Ended | ||||||
| December 28, 2013 | December 29, 2012 | |||||
| Cash and cash equivalents, beginning of the period | $ | 14,259 | $ | 10,746 | ||
| Operating activities: | ||||||
| Net income | 13,072 | 13,078 | ||||
| Adjustments to reconcile net income to cash generated by operating activities: | ||||||
| Depreciation and amortization | 2,144 | 1,588 | ||||
| Share-based compensation expense | 681 | 545 | ||||
| Deferred income tax expense | 1,253 | 1,179 | ||||
| Changes in operating assets and liabilities: | ||||||
| Accounts receivable, net | (1,098) | (668) | ||||
| Inventories | (358) | (664) | ||||
| Vendor non-trade receivables | (3,459) | (2,174) | ||||
| Other current and non-current assets | (319) | 413 | ||||
| Accounts payable | 8,191 | 6,145 | ||||
| Deferred revenue | 1,368 | 1,611 | ||||
| Other current and non-current liabilities | 1,195 | 2,373 | ||||
| Cash generated by operating activities | 22,670 | 23,426 | ||||
| Investing activities: | ||||||
| Purchases of marketable securities | (48,397) | (37,192) | ||||
| Proceeds from maturities of marketable securities | 5,556 | 3,460 | ||||
| Proceeds from sales of marketable securities | 30,302 | 23,002 | ||||
| Payments made in connection with business acquisitions, net | (525) | (284) | ||||
| Payments for acquisition of property, plant and equipment | (1,985) | (2,317) | ||||
| Payments for acquisition of intangible assets | (59) | (138) | ||||
| Other | 5 | (52) | ||||
| Cash used in investing activities | (15,103) | (13,521) | ||||
| Financing activities: | ||||||
| Proceeds from issuance of common stock | 134 | 76 | ||||
| Excess tax benefits from equity awards | 280 | 404 | ||||
| Taxes paid related to net share settlement of equity awards | (365) | (534) | ||||
| Dividends and dividend equivalents paid | (2,769) | (2,493) | ||||
| Repurchase of common stock | (5,029) | (1,950) | ||||
| Cash used in financing activities | (7,749) | (4,497) | ||||
| Increase/(decrease) in cash and cash equivalents | (182) | 5,408 | ||||
| Cash and cash equivalents, end of the period | $ | 14,077 | $ | 16,154 | ||
| Supplemental cash flow disclosure: | ||||||
| Cash paid for income taxes, net | $ | 3,387 | $ | 1,890 | ||
| Cash paid for interest | $ | 161 | $ | 0 | ||
| Apple Inc. | |||||||||||||||||||||
| Q1 2014 Unaudited Summary Data | |||||||||||||||||||||
| (Units in thousands, Revenue in millions) | |||||||||||||||||||||
| Q1'14 | Q4'13 | Q1'13 |
Sequential |
Year/Year Change |
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| Operating Segments | Revenue | Revenue | Revenue | Revenue | Revenue | ||||||||||||||||
| Americas | $20,098 | $13,941 | $20,341 | 44% | - 1% | ||||||||||||||||
| Europe | 13,073 | 8,005 | 12,464 | 63% | 5% | ||||||||||||||||
| Greater China (a) | 8,844 | 5,733 | 6,830 | 54% | 29% | ||||||||||||||||
| Japan | 4,948 | 3,341 | 4,443 | 48% | 11% | ||||||||||||||||
| Rest of Asia Pacific | 3,633 | 1,980 | 3,993 | 83% | - 9% | ||||||||||||||||
| Retail | 6,998 | 4,472 | 6,441 | 56% | 9% | ||||||||||||||||
| Total Apple | $57,594 | $37,472 | $54,512 | 54% | 6% | ||||||||||||||||
| Q1'14 | Q4'13 | Q1'13 |
Sequential |
Year/Year Change | |||||||||||||||||
| Product Summary | Units | Revenue | Units | Revenue | Units | Revenue | Units | Revenue | Units | Revenue | |||||||||||
| iPhone (b) | 51,025 | $32,498 | 33,797 | $19,510 | 47,789 | $30,660 | 51% | 67% | 7% | 6% | |||||||||||
| iPad (b) | 26,035 | 11,468 | 14,079 | 6,186 | 22,860 | 10,674 | 85% | 85% | 14% | 7% | |||||||||||
| Mac (b) | 4,837 | 6,395 | 4,574 | 5,624 | 4,061 | 5,519 | 6% | 14% | 19% | 16% | |||||||||||
| iPod (b) | 6,049 | 973 | 3,498 | 573 | 12,679 | 2,143 | 73% | 70% | - 52% | - 55% | |||||||||||
| iTunes/Software/Services (c) | 4,397 | 4,260 | 3,687 | 3% | 19% | ||||||||||||||||
| Accessories (d) | 1,863 | 1,319 | 1,829 | 41% | 2% | ||||||||||||||||
| Total Apple | $57,594 | $37,472 | $54,512 | 54% | 6% | ||||||||||||||||
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(a) |
Greater China includes China, Hong Kong and Taiwan. |
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(b) |
Includes deferrals and amortization of related non-software services and software upgrade rights. |
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(c) |
Includes revenue from sales on the iTunes Store, the App Store, the Mac App Store, and the iBooks Store, and revenue from sales of AppleCare, licensing and other services. |
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(d) |
Includes sales of hardware peripherals and Apple-branded and third-party accessories for iPhone, iPad, Mac and iPod. |