Apple celebrates an incredible quarter, posts record $18 billion profit

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Apple celebrates an incredible quarter, posting record quarter profit of $18 billion
Company posts record quarterly net profit of $18 billion – biggest quarterly profit in history of any company
iPhone sales set a new record (74.5 million sold in Q1)

iPhone 6

Apple’s record iPhone results prove no mobile market leader’s position is ever secure, says IHS Technology

Apple today announced financial results for its fiscal 2015 first quarter ended December 27, 2014. The Company posted record quarterly revenue of $74.6 billion and record quarterly net profit of $18 billion, or $3.06 per diluted share. These results compare to revenue of $57.6 billion and net profit of $13.1 billion, or $2.07 per diluted share, in the year-ago quarter. Gross margin was 39.9 percent compared to 37.9 percent in the year-ago quarter. International sales accounted for 65 percent of the quarter’s revenue.

The results were fueled by all-time record revenue from iPhone and Mac sales as well as record performance of the App Store. iPhone unit sales of 74.5 million also set a new record.

“We’d like to thank our customers for an incredible quarter, which saw demand for Apple products soar to an all-time high,” said Tim Cook, Apple’s CEO. “Our revenue grew 30 percent over last year to $74.6 billion, and the execution by our teams to achieve these results was simply phenomenal.”

“Our exceptional results produced EPS growth of 48 percent over last year, and $33.7 billion in operating cash flow during the quarter, an all-time record,” said Luca Maestri, Apple’s CFO. “We spent over $8 billion on our capital return program, bringing total returns to investors to almost $103 billion, over $57 billion of which occurred in just the last 12 months.”

Apple provided the following guidance for its fiscal 2015 second quarter:

-revenue between $52 billion and $55 billion
-gross margin between 38.5 percent and 39.5 percent
-operating expenses between $5.4 billion and $5.5 billion
-other income/(expense) of $350 million
-tax rate of 26.3 percent

Apple’s board of directors also declared a cash dividend of $.47 per share of the Company’s common stock.

Apple’s record iPhone results prove no mobile market leader’s position is ever secure- IHS Technology

Apple has overtaken former market leader Microsoft – which includes Nokia’s devices unit – to become the second largest manufacturer of mobile handsets in the world. Nokia led the mobile handset market for over a decade but is now pushed out of the top two. Apple’s record iPhone results are also entirely premium smartphones while Microsoft’s smartphone shipments represent just 21% of its 50 million handset shipments.

The mobile handset market is highly competitive with market leader Samsung holding 23% of the global handset market volume in Q3. This compares to 12% of Nokia/Microsoft and 9% for Apple. Chinese brands Xiaomi, TCL-Alcatel and Huawei as well as LG rounded out the top 7 brands with approximately 4% market share respectively.

Daniel Gleeson, Senior Analyst, mobile devices at IHS:

“Apple now sits behind only Samsung in handset shipments, with Samsung still to report Q4 shipments, despite Apple only having entered the mobile phone market late in 2007. This is a very impressive achievement for a company with the highest average selling price per handset in the industry. Apple sells premium devices for over $600 each whereas the average selling price of a Nokia handset was 93% less at just $45.”

“During Nokia’s heyday it would regularly post quarterly shipment numbers in excess of 100 million, peaking at 133.5 million units in Q4 2007. In that same quarter, Apple posted just 2.3 million shipments of its fledging iPhone product. It took Apple until Q2 2011 to ship more than 20 million in a quarter, when it also surpassed Nokia’s smartphone shipment volumes.”

Wayne Lam, Senior Analyst, Mobile Electronics at IHS:

“Today’s mobile handset market leaders, Samsung and Apple, do not have an unassailable position. Samsung is showing signs of weakness with its handset shipments flat for the past two years. Apple too must be wary of new competitive threats if it is to maintain its position. Both leaders risk losing share to the fast growing brands from China such as Xiaomi, Lenovo and Huawei.”

“While Apple’s ascent is remarkable, it also serves as a stark reminder of how quickly fortunes can change. Nokia seemed impervious for many years at the top of the market, but has now hit a spiral of decline which led to Nokia to sell its devices business unit to Microsoft in 2014. Motorola and Blackberry are two other brands that have suffered dramatic falls from grace in the past few years.”

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