Apple Q2 2014 Fiscal Results
by Brett Howse on April 23, 2014 7:50 PM EST- Posted in
- Apple
- Mac
- Smartphones
- Mobile
- Tablets
Today Apple announced its Q2 results, and sales of the iPhone continue to dominate revenue and earnings for the company.
Revenue for the quarter came in at $45.6B – a 4.7% increase year over year, and a down sequentially from the always strong holiday season.
Net profit came in at $10.2B for the quarter, resulting in Earnings per Share of $11.62 – beating the consensus of $10.41. This was an increase of 7.3% over Q2 last year.
| Apple Q2 2014 Financial Results (Non-GAAP) | |||||
| Q2'2014 | Q1'2014 | Q2'2013 | |||
| Revenue | $45.646B | $57.594B | $43.603B | ||
| Net Income | $10.2B | $13.1B | $9.5B | ||
| Margins | 39.9% | 37.9% | 37.5% | ||
iPhone is far and away the largest product at Apple, with unit sales of 43.7 million for the quarter. This is a 17% increase over the same time last year, and a 14% increase in revenue. iPhone sales accounted for 57% of Apple’s Q2 revenue. The large increase in iPhone sales can be at least partially attributed to increases in sales in both Japan and China, though revenue from the rest of the Asia Pacific region was down.
Software, Services, and App/Music store sales came in at $4.6B for the quarter – up both year over year (11%) and sequentially (4%).
Mac sales were up 5% year over year with 4.1 million Macs sold, but down from 4.8 million last quarter.
iPad sales were down 16% year over year, and 37% sequentially, tempering the increase in iPhone sales. Some of the drop was explained by channel inventory changes, but in the end Apple reports how many devices it sells to the channel every quarter so that is the number that matters. If there was a strong demand for the product, then it’s unlikely there would be a large number unsold in the channel to worry about.
Finally, iPod sales continued their decline with 2.761 million devices sold – down 51% year over year and 54% sequentially. iPod is no longer a billion dollar business for Apple, with only $461M in revenue from the once loved device.
| Apple Q2 2014 Device Sales (millions) | |||||
| Q2'2014 | Q1'2014 | Q2'2013 | |||
| iPhone | 43.719 | 51.025 | 37.430 | ||
| iPad | 16.350 | 26.035 | 19.477 | ||
| Mac | 4.136 | 4.837 | 3.952 | ||
| iPod | 2.761 | 6.049 | 5.633 | ||
| Apple Q2 2014 Revenue by Product (billions) | |||||
| Q2'2014 | Q1'2014 | Q2'2013 | Revenue for current quarter | ||
| iPhone | $26.064 | $32.498 | $22.955 | 57.1% | |
| iPad | $7.610 | $11.468 | $8.746 | 16.7% | |
| Mac | $5.519 | $6.395 | $5.447 | 12.1% | |
| iPod | $0.461 | $0.973 | $0.962 | 1% | |
| iTunes/Software/Services | $4.573 | $4.397 | $4.114 | 10% | |
| Accessories | $1.419 | $1.863 | $1.379 | 3.1% | |
Apple CEO Tim Cook also announced more changes to the Capital Return Program. From August 2012 to March 2014, Apple has given $66 billion back to shareholders through the program. As part of this program, Apple’s board has approved an increase in the share repurchasing program from $60B to $90B. On top of this, the quarterly dividend has increased by about 8%, and they have plans to increase the dividend annually going forward.
Finally, Apple announced a stock split of 7-1. Each Apple share at the close of business June 2, 2014 will receive six extra shares for each share held. Trading will begin again on June 9th, 2014.
Overall, it was another solid quarter for Apple. iPhone sales keep providing them strong revenue, but it is slightly worrisome that the iPad sales have not continued at the same pace. There are likely many reasons for this including strong competition in the space, and people less likely to upgrade their iPads annually or semi-annually like the phone market. It’s obviously too early to call any trends here though, so we’ll have to wait and see how the numbers look in a few months.
Source: Apple Inc
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ciparis - Wednesday, April 23, 2014 - link
The com main your table should be a decimal :)ciparis - Wednesday, April 23, 2014 - link
Ugh. The comma in your table should be a decimal... I blame autocorrect for both.Brett Howse - Wednesday, April 23, 2014 - link
Fixed!tipoo - Wednesday, April 23, 2014 - link
Wow, the iPod dropping to under half a mill. Chump change for a company like this. We all knew it was a long time coming, but I still wish the iPods got more love from them. The newest Touch on sale is based on the old A5 processor for instance.kyuu - Wednesday, April 23, 2014 - link
Er, under half a mil? The table says 2.7 mil.But anyways, the decline of the iPod is predictable, given that a smartphone can duplicate all the same functionality and more. They're simply redundant nowadays outside of people who still prefer a dedicated music player, and possibly parents who don't want their kids to have a full-blown smartphone.
tipoo - Wednesday, April 23, 2014 - link
Whoops, half a *billion*, $461MBSMonitor - Thursday, April 24, 2014 - link
Yeah and I would guess the majority of those iPod sales are the small ones. $100 for 2-4GB. For those on the go, working out, etc.. Their size will keep them relevant, but the iPod touch is kinda pointless at this point.solipsism - Tuesday, April 29, 2014 - link
I'm not so sure that more than half are the iPod Shuffle. Sure, the lower price point would typically lead to that conclusion because it can reach a larger market but the iPod Shuffle also doesn't have to refreshed often. I'm still using my 1GB 3rd(?) gen iPod Shuffle in a waterproof casing for swimming. Still only need to charge it once a month.The average price per iPod comes out to $167. That means it's both well below the iPod Touch and well above the iPod Shuffle so it could really by anything. I added up the three iPod Touch models ($229, $299, and $399) to get a mean average of $309 which I then added to the iPod Shuffle's $49 and then decided by 2 to get it's average of $179, which is very close to $167. That would mean when a random iPod Touch is sold one iPod Shuffle is shown (and if the $229 iPod Touch is sold more frequently than the others it would mean it's outselling the iPod Shuffle. Or it could mostly be the iPod Nano at $149 (I doubt the iPod Classic is selling many units).
eanazag - Thursday, April 24, 2014 - link
Agreed. And the pricing makes the iPod a foolish buy. Speaking of the iPod Touch. Apple hasn't really innovated here in some years.solipsism - Tuesday, April 29, 2014 - link
They updated it to the 4" size and used the same display as the iPhone 5 back in 2012. Before that it was 2010 when they updated it and back then it was Retina but it used a TN panel whilst the iPhone 4 was IPS.I suspect now that it's been 2 years and we're likely seeing a new display size we'll likely see a new Pod Touch that mirrors much of the new iPhone. I think the R&D and production are so minute and there are still millions per year being sold that it makes business sense to still offer it.