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Apple profit zooms 50 per cent but shares droop!

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By Noel Young, Correspondent

October 18, 2011 | 3 min read

When is a 50 per cent rise in profits not good enough? When you're Apple, it seems. Apple yesterday announced strong financial results for the 2011 fourth quarter ended September 24, 2011. Quarterly revenue was $28.27 billion and quarterly net profit $6.62 billion - compared to revenue of $20.34 billion and net quarterly profit of $4.31 billion in the same period a year ago, an increase of more than 50 per cent.

Apple CEO Tim Cook

But the company's shares fell 6.3% in after-hours trading to $395.50, as the results missed analysts' expectations. The Wall Street Journal said the company had hit "a bump in the road" as phone buyers held off buying the iPhone4, waiting for the new version, which turned out to be the iPhone 4S. Profits were $7.05 a share, compared with $4.64 a share, a year earlier. But the analysts had predicted a profit of $7.31 a share.

Read more at Wall Street Journal

Gross margin was 40.3 percent compared to 36.9 percent in the year-ago quarter. International sales accounted for 63 percent of the quarter’s revenue.

In all 17.07 million iPhones were sold in the quarter, 21 percent unit more than the year-ago quarter. The analysts ,had, however expected 20 million. For iPads, the figure was 11.12 million during the quarter, a 166 percent increase over the year-ago quarter.

Not to forget the Mac itself! The Company sold 4.89 million Macs during the quarter, a 26 percent unit increase over the year-ago quarter. Only decliner was iPods - at 6.62 million iPods, a 27 percent unit decline from the year-ago quarter.

Tim Cook, Apple’s CEO, began with a tribute to Steve Jobs, "a great human being". Then he moved into the figures: “We are thrilled with the very strong finish of an outstanding fiscal 2011, growing annual revenue to $108 billion and growing earnings to $26 billion,”he said.

“Customer response to iPhone 4S has been fantastic. We have strong momentum going into the holiday season, and we remain really enthusiastic about our product pipeline.”

Peter Oppenheimer, Apple’s CFO said, “We are extremely pleased with our record September quarter revenue and earnings, and with cash generation of $5.4 billion during the quarter.

“Looking ahead to the first fiscal quarter of 2012, which will span 14 weeks rather than 13, we expect revenue of about $37 billion and we expect diluted earnings per share of about $9.30.”

Michael Obuchowski, chief investment officer at First Empire Asset Management said, “That the company can maintain the growth rate that some of the analysts envision is not very realistic. There will be a reevaluation of the analysts’ expectations.”

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