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Apple earnings handily beat the Street again thanks to massive iPhone 4S sales

Posted: , by Daniel P.

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Apple earnings handily beat the Street again thanks to massive iPhone 4S sales
Apple just outed its earnings report for the last quarter of 2011, and the results are earnings of $13.87 per share versus the analysts' average estimates of $10.08 per share.

AAPL was up more than 8% at one time after the earnings

AAPL was up more than 8% at one time after the earnings

That's a huge beat after Apple missing the last time it reported, for the first time in many quarters. Now, thanks to massive iPhone 4S sales, we seem to be back to Cupertino beating analysts' expectations based on its own modest guidances, stock surging... wash, rinse, repeat.

Apple reported revenue of $46.3 billion and net profit out of it the astonishing $13.1 billion. In comparison, the same October-December quarter in 2010 it made "just" $6 billion, so it effectively more than doubled net profit just in a year's time. 

The fruit company sold 37.04 million iPhones in the quarter, beating even the most outrageous estimates there were, which spanned 25-36 million max. Apple also sold 15.43 million iPads, a 111 percent unit increase over the same quarter in 2010. At 15.4 million iPods sold, the company saw a 21 percent unit decline from the Q4 of 2010, and that could be easily predicted.

Apple achieved the record 44.7% profit margin, which was positively affected half by falling components prices, like RAM and NAND Flash, and half by the revenue being heavily skewed towards the most profitable item for Apple - the new iPhone 4S. $24.4 billion of the revenue came from sales of iPhones and accessories, which our quick calculations show to translate into roughly the cool $659 per iPhone sold

The iPhone 4S was the most popular iPhone during the quarter, said the CFO, which brought in this incredibly high ASP number. The only thing that held Apple from even higher margins were the higher hard drive prices due to the floods in Thailand.

That was Apple's first quarter without Steve Jobs at the helm, and the new captain of the space ship from Cupertino, Tim Cook, had the following to say:

We’re thrilled with our outstanding results and record-breaking sales of iPhones, iPads and Macs. Apple’s momentum is incredibly strong, and we have some amazing new products in the pipeline.

Peter Oppenheimer, Apple’s Chief Financial Officer, added: “We are very happy to have generated over $17.5 billion in cash flow from operations during the December quarter. Looking ahead to the second fiscal quarter of 2012, which will span 13 weeks, we expect revenue of about $32.5 billion and we expect diluted earnings per share of about $8.50”. These forward guidance numbers are also beating the analysts' expectations on which the whole earnings game is based. 

The demand in China has been "off the charts" said the CFO, despite the iPhone 4S halted in retail stores due to the kerfuffle it caused. Apple's CFO said that the company now has $97.6 billion in the bank (mostly offshore), which is a 16 billion increase compared to the last numbers. "We are actively discussing uses of our cash balance and don't have anything specific to announce today," Oppenheimer said.

When asked if Apple is worried about the cheaper tablet competition, and the Amazon Kindle Fire in particular, Tim Cook chimed in:

We were happy with the 15.4 million iPads we were able to sell. There will come a day when the tablet market in units is larger than the PC market. In fact, it's interesting to note that in the U.S. - it's clear from IDC's recent data - that tablet sales exceeded PC sales in the U.S. You can see different indicators that there's significant momentum. 

As for competition, the iPad is in a class by itself. People really want to do multiple things with their tablets, so we don't see these limited-function tablets being in the same category. There are clearly people who will buy them in a fair number of units, but I don't think people who want to buy an iPad would go for a limited-function device. We're going to continue to compete with anyone currently shipping tablets.
Asked about its personal experience in the first four months on the job as Apple's CEO, Tim Cook added: "I love Apple and it's a reminder every day at how much of a privilege it is to work with a team of people who are so incredible."

Still, Apple cautioned that it won't repeat these record numbers, especially the huge profit margin. Its forward guidance is now lower than the usual seasonal adjustment, due to the quarter it just reported being longer than normal, and also the strengthened US dollar versus the Euro, which is likely to affect sales in the current quarter.

Asked about if Apple intends to implement features that come standard in flagship Android handsets now, like larger screens with HD resolution, and LTE connectivity, Tim Cook simply said: "I wouldn't comment on the future roadmap. I would point out that we just sold a record 37M iPhones. We could have sold more if we had more in supply. There's a lot of people who really love what we're doing."

And finally, when asked if the game is becoming a two-horse race now, between Android and iOS, Tim Cook concluded that there is also a horse in Redmond that always runs and will keep running. "We focus on making the world's best products. We ignore how many horses there are." Spoken like a true Apple CEO.

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posted on 24 Jan 2012, 15:56 13

1. iKingTrust (banned) (Posts: 716; Member since: 27 Jul 2011)


WOW. I love it

posted on 24 Jan 2012, 17:07 10

10. jogutier (Posts: 324; Member since: 12 Feb 2010)


And then they spend it on suing people. LOL!

posted on 25 Jan 2012, 17:20

45. 530gemini (Posts: 2198; Member since: 09 Sep 2010)


@jog. Suing is only a small portion of Apple's spendings. But for you, that's of course the most noticeable one :)

posted on 24 Jan 2012, 17:36 5

15. G2Noobin (Posts: 81; Member since: 17 Dec 2011)


Wow!! i have absolutely no clue as to why a person would even consider a complicated....function wise.....simply....dumbness wise.....and basically make no sense platform that ios and mac altogether provide......i dont even no how to close screens on a mac computer...they have three dots.....absolutely no ease of use while working a mac product except for lets say an ipod....but even then

Android... man you can upgrade downgrade customize....de-customize....change functions.....build functions......and actually USE it as it is meant to be....put skins....change skins.....basically anything you want....and they haven't even unleashed the full potential of linux based customization.

Anyone that cares about their computer/pda puts it in a case so iphoney asthetics isn't so appealing all lock-up behind a case... and i never like the bulk of an iphone. not my taste. hurray for the con job...

the only thing i think that is remarkable would be the warranty but granted the price point of 650 for a 500 dollar product you are in essence paying for a 150 dollar warranty juxtaposed by plans calculated by engineering grade mathematicians they know exactly how they are linchin your pocket book.

posted on 24 Jan 2012, 18:11 3

22. E.N. (Posts: 2610; Member since: 25 Jan 2009)


thanks for sharing!!

posted on 24 Jan 2012, 18:25 2

24. JeffdaBeat (unregistered)


Wait a second...you just admitted your own ignorance as far as iOS and OSX goes and yet you still find a way to come to a determination about it...without learning it?

In a nutshell, the reason Apple is successful is because they don't cater to nerds who are in the minority as far as purchasing power goes. They make products that anyone can use. People who didn't understand Blackberry OS, Windows Mobile, and Palm felt more comfortable using iOS because it's clean and easy to use. People also don't have to fear about messing up their phone because Apple doesn't allow them to. It may suck for folks who like heavy customization, but for the consumer majority, it works just fine.

What's funny is that you say Macs are complicated function wise, but they are actually quite simple. In fact, Microsoft has borrowed a lot from OSX in making Windows 7, which got great reviews compared to Windows Vista. Maybe try to figure something out before developing an opinion of it.

posted on 25 Jan 2012, 00:11 3

35. G2Noobin (Posts: 81; Member since: 17 Dec 2011)


Load of garbage is what a mac is.....it will fall off just like it did in the 90s! peace

posted on 25 Jan 2012, 17:23

46. 530gemini (Posts: 2198; Member since: 09 Sep 2010)


@g2. And you will own a multi billion dollar company someday. Uhmmmmm, NOT, lol.

posted on 26 Jan 2012, 19:38

60. G2Noobin (Posts: 81; Member since: 17 Dec 2011)


the question is do i want billion dollar company....also the second question is, that they got to rat chasing its own tail: will you own a billion dollar company??? lmao

posted on 24 Jan 2012, 20:09 3

29. ardent1 (Posts: 2000; Member since: 16 Apr 2011)


The typical android camp arguments against the iPhone found on phonearena.com are: the form factor is dated, the screen is too small, the lack of memory 512Mb vs 1Gb for android, missing SD card slot for more storage, removable battery, anything samsung desperately uses in its commercials, etc, etc, etc.

At the end of the day, people want iphones -- they are happy with the form factor, the small 3.5" retina display, the 8 MP camera that is setting the new standard, the revoluntionary iOS 5.0, etc, etc, etc. and paying big bucks in the process. And still, the apple ifanatics continue to wait long lines for new product introductions.

And you will continue to see Samsung attacking Apple's dated features in tv ads. Samsunged really means Apple-envy.

posted on 25 Jan 2012, 00:16 1

36. G2Noobin (Posts: 81; Member since: 17 Dec 2011)


Mac suck all day every day for life... People will wake up really and i mean really soon! Giving it a year...

SUCK A##ness is what ios is retina is almost similar to my samsung exhibit 4G and it has a 512 ram smoov as buddda!! Revolutioinary....lmao steve jobs basically took what file sharing did for free and and started charging money for it...and called it itunes aka,.. crapola....lmfao....@iphone users....does it give you a false sense of class!....i wont always bash em they got a smoov os...but other than that....hmmm dont see any point.....they are pusshing a small computer as a phone....its not a phone it is in all actuality a computer and should act as ONE!

posted on 25 Jan 2012, 08:45 1

41. steev57 (Posts: 8; Member since: 01 Dec 2011)


"SUCK A##ness is what ios is retina is almost similar to my samsung exhibit 4G and it has a 512 ram smoov as buddda!!"

I really hope English isn't your first language.

posted on 26 Jan 2012, 19:26

55. G2Noobin (Posts: 81; Member since: 17 Dec 2011)


You douchebags have got to get some better comebacks than is english your first language....lmfao and all the other words were what cryptic cyborgian or clingon like your a$$.

posted on 24 Jan 2012, 15:57 10

2. Birds (Posts: 1164; Member since: 21 Nov 2011)


I would Troll because I hate Apple but this is still good news.

posted on 24 Jan 2012, 16:01 13

3. aztaxia12295 (Posts: 272; Member since: 22 Nov 2009)


things i like about apple:
-their products
-their security/reliability
-their easiness
-their customer service
-steve jobs

things i hate about apple:
-their suing
-their "this is revolutionary" attitude
-their 7 hour long keynotes
-and most importantly, THEIR FANS!

bottom line, if apple weren't so cold hearted to everyone else, i would REALLY respect this report, but their suing and their annoying fans have tainted my likings

posted on 24 Jan 2012, 16:14 5

6. greathero1 (Posts: 566; Member since: 13 Jun 2008)


Well, on the fans part. There rabid fanboys are big douche bags just like the rabid Android ones. They are more or less the same.

posted on 24 Jan 2012, 17:12 4

11. jogutier (Posts: 324; Member since: 12 Feb 2010)


Strongly disagree.... That's two way different worlds. Sorry....

posted on 24 Jan 2012, 17:43 1

18. G2Noobin (Posts: 81; Member since: 17 Dec 2011)


android fans are not fans with nothing but fervour....the functionality and customization allows them to realize that they have a computing device in their hand not a statement-in-hand....

someone that appreciates substance can qualify as more than a fan more of a avid user....someone that appreciates style would be more of a fan....ergo apple fanboys.

I would consider using an crab-pple if the ease of use weren't like a game itself....decode this to get to this.... I don't know it just seem apple fans...well .....are just a bit ....simple....and not in the good way.

posted on 24 Jan 2012, 18:16 4

23. E.N. (Posts: 2610; Member since: 25 Jan 2009)


Okay G2Noobin, you like Android, we get it. Judging only from the comments you've posted thus far, you're still a fanboy.....maybe worse

posted on 25 Jan 2012, 00:18

37. G2Noobin (Posts: 81; Member since: 17 Dec 2011)


lmfao what you got a dose of floride on tap...lmao labeling me as an internet criminal lmfao!!

posted on 25 Jan 2012, 17:31 1

48. 530gemini (Posts: 2198; Member since: 09 Sep 2010)


@g2. Consumers buy products for different reasons. You obviously have your own reasons why you prefer android over ios. But obviously, android does ot cut it for everyone. Just like ios does not cut it for everyone. Now why is that hard for you to understand? Why does a person buy a $40,000 base model BMW when he could have bought a $20,000 fully loaded Hyundai with more features?

Other people's choices should not be your problem, and there is no reason why it should upset you. Unless you're a crazy person :)

posted on 26 Jan 2012, 19:29

56. G2Noobin (Posts: 81; Member since: 17 Dec 2011)


Agreed great comment....but ios still just sucks....imna just saying people have got to wake up....the country is full of noobs that have nothing but ego....and he said she said....become individuals and get better laws....with better ethicsl and morilistic/logic backings....but what do i know.

posted on 24 Jan 2012, 18:28 3

25. JeffdaBeat (unregistered)


Perception, my friend. Nothing is revolutionary anymore. But if you think like a capitalist, you'd say the same thing. You have to promote your product as if it's the best thing in the world. Otherwise, no one will buy into it. Apple is successful for the same reason you hate them. So if you were a capitalist and wanted to make money, would you keep doing what makes you money or listen to someone on a message board? And that's not a slight against you or saying your words aren't valid. But you have to understand that business aren't trying to win YOU over. They want to get as much money as possible. That's capitalism. Apple has found what works and other companies are trying to follow that.

posted on 24 Jan 2012, 16:10 4

4. tq3866 (Posts: 25; Member since: 20 Jan 2011)


Damn...13.1 billion in profits, wow

posted on 24 Jan 2012, 16:13 3

5. Scott_H (Posts: 167; Member since: 28 Oct 2011)


This is a monumental accomplishment.

posted on 24 Jan 2012, 16:36 6

7. E.N. (Posts: 2610; Member since: 25 Jan 2009)


So much for all the predictions of Apple's decline/death. And this is just for the 4S, I'm sure the iPhone 5/6 will be much better than this.

posted on 24 Jan 2012, 17:45

19. G2Noobin (Posts: 81; Member since: 17 Dec 2011)


OH its coming....!

posted on 24 Jan 2012, 18:03 3

20. E.N. (Posts: 2610; Member since: 25 Jan 2009)


Sure, sometime in the next 5, 10 ,15 years maybe. But until it actually does happen, why don't we just not keep rambling about it as to not ruin the surprise. I like surprises.

posted on 25 Jan 2012, 17:33

49. 530gemini (Posts: 2198; Member since: 09 Sep 2010)


@g2. When? You'd more than likely die first before Apple does :)

posted on 24 Jan 2012, 16:47 1

8. darac (Posts: 2156; Member since: 17 Oct 2011)


these news make me want to puke .. : (

and oh, "the limited products " reference towards competing tablets!
just disgusting

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