The Cupertino-based tech company Apple has reported its financial results for its fiscal 2015 first-quarter in January 27th, 2015. The company posted a record revenue of $74.6 billion and record quarterly net profit of $18 billion, or $3.06 per diluted share.
The achievement marks the highest earning the company has made since its founding in 1976, as well as the highest if compared to other companies in other industries, ever.
Apple's fiscal 2015 first-quarter ended in December 27, 2014. These results compare to revenue of $57.6 billion and net profit of $13.1 billion, or $2.07 per diluted share, in 2014 quarter. Gross margin was 39.9 percent compared to 37.9 percent. International sales accounted 65 percent of the company's quarter revenue.
The massive number is proudly helped by an all-time revenue record from iPhone and Mac sales, as well as the performance of the App Store. Apple sold 74.5 million iPhones, or roughly 30,000 iPhones sold every hour. This has made the iPhone, which is already the single best-selling gadget of all time, outsold some gadgets made by entire industries. In fact, it even very nearly outsold the entire PC in that given time.
While Mac sales also grew, about 15 percent to a record 5.5 million, the iPad sales continued to fall, down 18 percent to 21.4 million.
"We'd like to thank our customers for an incredible quarter, which saw demand for Apple products soar to an all-time high," said CEO Tim Cook. "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."
The record results produced EPS growth of 48 percent over 2014, and its $33.7 billion operating cash flow during the quarter also set an all-time record.
"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," said CFO Luca Maestri.
From the announcement, Apple is providing the following for its fiscal 2015 second quarter:
- Revenue between $52 billion and $55 billion.
- Gross margin between 38.5 percent and 39.5 percent.
- Gperating expenses between $5.4 billion and $5.5 billion.
- Other income/(expense) of $350 million.
- Tax rate of 26.3 percent.
Shares rose 5 percent to $114.90 in after-hours trading. Apple’s board of directors has declared a cash dividend of $.47 per share of the Company’s common stock, and the dividend is payable on February 12, 2015.
$18 billion profit is seen as one of the biggest ever reported by a public company, worldwide. And Apple, seen as one of the most valuable company in the world, with that massive achievement, is sitting on almost $178 billion cash, up 15 percent from the prior quarter.
From Trendsetter to Follower: Not a Big Deal
Apple that is famous for creating trends for others to follow, is now not shy to do otherwise. Since the late Steve Jobs formerly introduced the first iPhone in June 2007, the company has never accepted screen size as one of the major reason for people in buying iPhones. Rivals has thought the other way around and created big-screen smartphones.
By thinking that size "doesn't matter", but price does, in 2013, Apple released the iPhone 5C, a lower-cost version of the smartphone that analysts thought would help increase its growth. But the latest numbers suggest that consumers wanted bigger phones, not cheaper ones.
From the 3 factors that can affect people's decision in buying a smartphone: size, quality and price, Apple opted for quality and price, a choice that is proven to be wrong. For high-end smartphones, quality does come first, second is screen size. Price comes third.
Apple's neglecting the trend has made the company's performance in selling iPhones outside the U.S. rather poor if compared to Samsung that went with Galaxy series which goes par with iPhone versions. But when it eventually release larger and larger models, especially the iPhone 6 Plus, Apple is having the influence once again. Furthermore, the deal with China's biggest mobile provider, China Mobile (CHL), which went into effect in the first quarter of 2014, has helped in boosting sales.
Apple was positioned in number 6, trailing after its Asian rivals Huawei, Lenovo, Samsung, Xiaomi and Yulong. But closes the gap very quickly and rose to number 1 before the time ends.
For the first time, Apple sold more iPhones in China than in the U.S. - an achievement that was once believed to be impossible.
"It's an incredible market," said Cook. "People love Apple products. And we are going to do our best to serve the market."
Despite the success, Cook stated that the company's earning is hurt because of the strong dollar outside the U.S.. About 4 percent has been cut-off from the company's international earning. But Maestri told that the company's revenue from China which grew 70 percent pose no big concern about the economic influence eating into results.
However,m Apple's greatest achievement could still (always) pose a potential problem. Since 65 percent of its quarterly revenue came from iPhone sales, Apple is expected to eventually encounter trouble from the ever-shifting consumer's taste and trends.