Apple’s 2013 Q4 Earnings Report

betApple released their 4th quarter fiscal earnings on Monday that topped analysts’ estimates with profits, quarterly revenue, and units sold but the tech giant came in short with gross margins as the company braces for growing competition, lower priced iPhones, and rising costs ahead of the upcoming holiday quarter.

Apple’s gross margin for the quarter was 37 percent compared to 40 percent in the year-ago quarter.

Apple posted a 4.2 percent increase in quarterly revenue of $37.5 billion and quarterly net profit of $7.5 billion or $8.26 per diluted share, compared to revenue of $36 billion and net profit of $8.2 billion or $8.67 per diluted share, in the year-ago quarter.

Those numbers represent a 4.7 percent decline in EPS and net profit down 8.6 percent year-over-year.

After launching a new round of hardware upgrades last week including the iPhone 5 S, the lower cost iPhone C, the lightweight iPad Air, and preparing to write down the cost of its latest free software Mavericks, Apple is now gearing up for a strong holiday quarter loaded with an arsenal of new products while packing a slightly lower profit forecast punch than analysts’ were expecting for the holiday quarter.

Apple forecasts their next quarter gross margins in the range of 36.5 percent to 37.5 percent compared to 38 percent estimated by analysts.

When Apple CFO Peter Oppenheimer was questioned during the conference call about Apple’s lower gross margins he cited several reasons: higher deferred revenue in Apple’s latest software (write down), richer mix of iPads with higher cost structure, and higher costs with the new Macs, and foreign exchange headwinds from the Japanese yen.

Holiday Quarter Guidance

Revenue guidance was in the range of $55 – 58 billion range.

“We’re excited to go into the holidays with our new iPhone 5c and iPhone 5s, iOS 7, the new iPad mini with Retina Display and the incredibly thin and light iPad Air, new MacBook Pros, the radical new Mac Pro, OS X Mavericks and the next generation iWork and iLife apps for OS X and iOS” said Apple CEO Tim Cook.

“I think it’s going to be an iPad Christmas” Cook added during the conference call.

Apple sold 33.8 million iPhones in Q4 2013, higher than 26.9 million in the year ago quarter and representing a gain over 25 percent. Analysts were estimating 33.4 million units sold for the quarter.

Apple sold 14.1 million tablets in Q4 2013, higher than 14.0 million in the year ago quarter. Analysts were estimating 14.3 million iPads sold for the quarter.

Apple sold 4.6 million Macs in Q4 2013, less than 4.9 million in the year ago quarter. Analysts were estimating 4.3 million Macs sold for the quarter.

Global Smartphone Marketshare

New data from research firm Strategy Analytics revealed that Apple and Samsung combined maintain a 48.6 percent global smartphone  market share with shipments in the third quarter of 2013, slightly higher than 48.5 percent in the third quarter of 2012. China’s Huawei came in third with a 5.1 percent global market share, up 67 percent from 4.4 percent in the third quarter of 2012.

Revenue Breakdown

Apple’s iPhones generate 53 percent of Apple’s revenues for the quarter ending Sept. 28th, 2013.

Apple’s iPads produce 19 percent while Mac’s amount to 13 percent.

The other category (iTunes, I-pod, etc.) bring in 15 percent of Apple’s revenues.

 

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