Tuesday, April 24, 2012

Apple's fiscal Q2 2012 results easily top expectations, but forecast is weak

Apple announced its fiscal Q2 2012 (calendar year Q1 2012) results on Tuesday, April 24, and the results topped expectations. Troublesome, though, was the forecast for this quarter’s results, which was below expectations.

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A look at the trend for Apple stock lately has shown that investors have been concerned about the outlook for the world's most valuable company (by market cap). Since it reached a peak of $636.23 on April 9, the stock has dropped 76 points to a close of $560.28 on April 24. The results given on Tuesday buoyed the stock in after-market trading, with the stock up 37 points at the time of this writing.

Revenue in the three months ended in March rose to $39.2 billion, with net income of $11.6 billion, or earnings per share of $12.30.

Analysts had been seeking $36.85 billion in revenue with $10.04 earnings per share. That was an profit increase of 94 percent year-over-year.

In addition, Apple said that during the quarter it sold 35.1 million iPhones in the quarter (88 percent unit increase year-over-year), 11.8 million iPads (151 percent unit increase year-over-year), 4 million Macs (7 percent unit increase year-over-year), and 7.7 million iPods (15 percent unit decline year-over-year). The iPod decline was expected, and continues the trend, as more users move to devices like the iPhone.

The bad news came from Peter Oppenheimer, Apple’s CFO, who said:

“Our record March quarter results drove $14 billion in cash flow from operations. Looking ahead to the third fiscal quarter, we expect revenue of about $34 billion and diluted earnings per share of about $8.68.”

It's that forecast that was the bad news. Analysts' consensus estimates for Apple's fiscal Q3 2012 were $37.4 billion and $9.95 per share.

Apple ended the quarter with $110.2 billion in cash, cash equivalents, and short- and long-term marketable securities. This burgeoning, nearly exploding chest of "savings" has meant that Apple will pay its first ever dividend later this year.

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