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Apple Announces Record Revenue but Flat Profit

By - Source: Apple | B 25 comments

22.9 million iPad units sold, but profits remain flat.

Apple has recorded record revenue but dire profit margins for its performance during 2012's fourth quarter.

The company sold 47.8 million iPhones during the quarter, an increase from the 37 million it sold during the fourth quarter of 2011. Comparatively, it sold 26.9 million iPhones during the third quarter of 2012. Revenue increased by 18 percent to $54.5 billion, but net profit remained unchanged from a year: the Cupertino firm generated $13.1 billion.

Apple shares dropped in after-hours trading, which has been attributed to the unimpressive sales of the iPhone even after the launch of the iPhone 5. It was previously expected to sell upwards of 50 million units. Following the earnings report, the firm's shares dropped by 10 percent.

Apple sold 22.9 million iPad units, a jump from the 15.4 million it sold during the same time period in 2011 and 14 million from the previous quarter. It sold around 1.7 million iPad units per week, an increase when compared to the 1.1 million sold per week the previous year. Although it didn't reveal specific sales figures pertaining to the iPad Mini, it stressed that it's been a "tremendous hit."

Mac sales decreased from 5.2 million in the fourth quarter of 2011 to 4.1 million during 2012's Q4. Apple said the drop is due to supply constraints with the new iMacs. Sales of the iPod, meanwhile, dropped from 15.4 million in 2011 to 12.7 million during Q4, 2012.

"We're thrilled with record revenue of over $54bn and sales of over 75 million iOS devices in a single quarter," said Apple CEO Tim Cook. "We're very confident in our product pipeline as we continue to focus on innovation and making the best products in the world."

“We’re pleased to have generated over $23 billion in cash flow from operations during the quarter,” said Apple CFO Peter Oppenheimer. "We established new all-time quarterly records for iPhone and iPad sales, significantly broadened our ecosystem, and generated Apple’s highest quarterly revenue ever.”

 

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  • 7 Hide
    warezme , January 24, 2013 3:16 PM
    So? Why does every big company expect their profits to keep growing? What is wrong with sustaining a healthy margin especially if a past trend exceeded normal growth. It's ridiculous that big business expects growth and profit and a bail out if it doesn't happen. If you don't make a profit maybe you need to change your business and if you are so big that you need a bailout, you need to be broken up because you're a monopoly.
  • 10 Hide
    calgary computer repair , January 24, 2013 3:18 PM
    I'd settle for flat profit and record revenue in my business.
  • 4 Hide
    stevo777 , January 24, 2013 3:21 PM
    I think the products that Steve Jobs had a hand in guiding have all been released and anything going forward will be Cook's handywork. It remains to be seen if there will be any real innovation left, but I have my doubts. They have so much money it would take a long time for them to really go under; however, I wouldn't be surprised to see them start losing a lot of market share as most of the cashflow is coming from a rapidly changing handheld environment.
  • 11 Hide
    santiagoanders , January 24, 2013 3:28 PM
    And apple shares are down 10% !!! LOL
  • 6 Hide
    Anonymous , January 24, 2013 3:35 PM
    How are apple not making a tonne of profit with the prices they charge, they charge their products at 3x their worth
  • 0 Hide
    calmstateofmind , January 24, 2013 3:44 PM
    wozza365How are apple not making a tonne of profit with the prices they charge, they charge their products at 3x their worth


    Did you not just read the article that you're posting on? iPhone sales are down, iPod sales are down, and Mac sales are down. They can price their products at 100x manufacturing cost, but if consumers don't buy amounts equal or close to what they project, they lose money.
  • 0 Hide
    g00fysmiley , January 24, 2013 3:49 PM
    JacekRingWho buys iPods anymore??? Don't you have a smartphone?


    depends, i hae a samsung galaxy nexus and between programs and media i have very little space left as it does not have expandable memory. I have a patriot gauntlet node with a 1tb hdd btu that requires more power and onyl lasts about 5 hours on a charge, i love my old 160 gig ipod classic for a music player, holds my 120 gigs of music and good battery life means i can leave it in the car or take it on a run without worrying about the batterry dying and my being without a phone
  • 2 Hide
    Schmalgar , January 24, 2013 3:59 PM
    So they 'only' made 13.1 billion in profit last year, and they 'only' made 13.1 billion this year? That right there is what's wrong with the stock driven business model. The thinking that if you don't make more profit this year than you did last year, that something is 'wrong'. There is NOTHING wrong with making 13.1 BILLION DOLLARS profit year after year. Seriously big OMG here.
  • 1 Hide
    headscratcher , January 24, 2013 4:21 PM
    SchmalgarSo they 'only' made 13.1 billion in profit last year, and they 'only' made 13.1 billion this year? That right there is what's wrong with the stock driven business model. The thinking that if you don't make more profit this year than you did last year, that something is 'wrong'. There is NOTHING wrong with making 13.1 BILLION DOLLARS profit year after year. Seriously big OMG here.

    Tell me, assuming you have a retirement portfolio, would you rather the stocks and funds within it stay flat or grow? Stocks that are mature and flat, generally have to start forking over large dividends (see Caterpillar) to maintain stock price. Nothing wrong with that stock market model.
    IMO, there is a lot wrong with a company that focuses too much on its stock price - makes me think of dot com bubble - but it must maintain a reasonable level.
  • 4 Hide
    the1kingbob , January 24, 2013 4:41 PM
    warezmeSo? Why does every big company expect their profits to keep growing?


    I think the problem here is not that their profits didn't keep growing. I think the problem is that they brought in more money and did more business, but that didn't transfer to making more money. So in the eyes of investors, they are not doing as good business as before.
  • 4 Hide
    jupiter optimus maximus , January 24, 2013 5:58 PM
    Now people see that apple can't grow forever and has to come down some day to a more reasonable stock price that reflects the market.
  • 2 Hide
    blurr91 , January 24, 2013 5:59 PM
    It's about managing expectations. Apple results are not disappointing in absolute terms. $13 billion in profit is nothing to sneeze at. However, what if you were expecing $14 billion profit? What if you had planned your investment portfolio using a $14 billion profit and stock pricing? That's a disappointment.

    Investment funds set a price target for all stocks based on a lot of factors. One of them is the expected profit. I expect Apple to make $14 billion this year and the market to embrace Apple's product and stock. The price target for the stock is $650. I buy Apple at $500 and will still make a profit.

    However, Apple only made $13 billion, with signs that future profit in jeopardy. The market seems to be losing faith in Apple. The investors on the ball would dump their stocks to limit their losses. Those who bought at $300 have already made a ton of money and will bail. Those who bought at $600 want to write off their losses and be done with it.

    That's how a company making $13 billion in pure profit can actually lose stock value. Expectations...
  • 0 Hide
    blurr91 , January 24, 2013 6:05 PM
    Here's an easier example:

    You work hard all year and expect a 5% raise. You plan your spending accordingly. The boss only gives you a 4% raise. Happy or disappointed?
  • 2 Hide
    bllue , January 24, 2013 6:59 PM
    I hope Apple stock keeps going down. Seriously their fad is dying, no reason to keep stock when it won't be going up again. Save your money and find the next big fad.
  • 0 Hide
    hate machine , January 24, 2013 7:11 PM
    bllueI hope Apple stock keeps going down. Seriously their fad is dying, no reason to keep stock when it won't be going up again. Save your money and find the next big fad.


    I do too, but only because I've been trying to make money using shorting and options. :0
  • 1 Hide
    bllue , January 24, 2013 7:36 PM
    jupiter optimus maximusNow people see that apple can't grow forever and has to come down some day to a more reasonable stock price that reflects the market.

    People also need to realize that Stevie Jobs is no longer the man in charge, the man who everyone has always worshiped. Just think about it, how likely are Apple to create the next big fad? They haven't put anything worth to be called innovation since the first iPad release, which happen at the time when the iPhone fad was getting to its peak. Sure they have over $100 billion but that does not guarantee they will succeed at pushing whatever they come up with next. They've had quite a share of controversy in the last months as well, from iOS 6 to Apple maps, the ebook fiasco, and so on. Again, you can say they have a lot of money but release a couple of fail products and the stock will plummet down faster than you can blink. If you think the stock went down 12% because profits did not go up, wait till you see what happens when a major product release fails. They have enough money to try a few times but the more failures they put out now, the more confidence investors and consumers will lose in Apple. It's a big gamble that many investors are not willing to take, and for good reasons. Expectations are high and it's unclear if Apple will succeed at the next big venture (whatever it is).
  • 0 Hide
    house70 , January 24, 2013 9:13 PM
    In other news, the wheels keep on turning...
    Seriously, the same can happen to any company. What is today hot, tomorrow is...not.
    Even in Android world, today is Samsung, tomorrow can be LG, SONY, Motorola or HTC (which, BTW, was hot 'yesterday'). These users are lucky, though, because they are not tied to one single device/manufacturer for their needs. Apple's enclosed ecosystem has created a eggs-in-one-basket situation for it's customers.
    The die-hards entrenched in the mindset "Apple or bust" feel really threatened by the very thought that Apple might find itself where it was a few years ago: at the bottom of the barrel. They have no alternative solutions to run to, unless they switch teams altogether. Some do, they wake up and smell the other flowers in the garden: WinPhone, Android, even FirefoxOS is around the corner, BB coming back, etc. The ones that are invested heavily (financially, apps, accessories etc.) into Apple's system are the ones that are the most vocal of them all. They know no freedom to choose, because Apple has not allowed them to peek over the wall.
    That's why when Apple messes something up the reaction is so violent: the analysts critique, the fans take it personally, the stocks plummet, and everyone freaks out.
  • 0 Hide
    alidan , January 25, 2013 12:48 AM
    JacekRingWho buys iPods anymore??? Don't you have a smartphone?

    $200 for an iPod $800 for an iPhone, tough decision to make there.

    SchmalgarSo they 'only' made 13.1 billion in profit last year, and they 'only' made 13.1 billion this year? That right there is what's wrong with the stock driven business model. The thinking that if you don't make more profit this year than you did last year, that something is 'wrong'. There is NOTHING wrong with making 13.1 BILLION DOLLARS profit year after year. Seriously big OMG here.


    From my understanding stocks is supposed to give you a stake in the company, the problem is one stocks are valued on the intangible property of said company, and then the value that intangible property is valued at how much money they make.
  • 1 Hide
    wemakeourfuture , January 25, 2013 12:56 AM
    calmstateofmindDid you not just read the article that you're posting on? iPhone sales are down, iPod sales are down, and Mac sales are down. They can price their products at 100x manufacturing cost, but if consumers don't buy amounts equal or close to what they project, they lose money.


    Actually you didn't read the article. Their profits increase is FLAT. They made billions and billions in profits that quarter and the entire year.

    iPhone sales went from 37 million to 47 million, but below estimates. They made billions of their iPhones but it was a miss compared to expectations.

    iPad sales nearly doubled from the previous years quarter, against made billions.

    Macs were down 1 million, this was a miss too, but again the rate of growth of Apple has decreased, does not mean they aren't making billions in profits, does not mean their margins are getting lower (they're actually higher), but the growth rate is missing expectations.

    If a company's growth rate is slow (rate of change in profits and other metrics) then its stock price will get slaughter, does not mean they aren't making a profit and won't in the future.

    Apple as a stock is pretty much dead, just like Microsofts for the past 10 years, doesn't mean there aren't opportunities to buy and sell. But just like Microsoft it may settle much lower than its high and stay there, but still be the most valuable tech company in the world for the near future. And longterm still a large cap tech company.
  • 0 Hide
    pg55555 , January 25, 2013 1:40 AM
    Quote:
    Did you not just read the article that you're posting on? iPhone sales are down, iPod sales are down, and Mac sales are down. They can price their products at 100x manufacturing cost, but if consumers don't buy amounts equal or close to what they project, they lose money


    Did you read the article? tehy sold 48 million iPhones vs 37 million previous year. and 23 million iPads vs17 million. So people are buying a LOT
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