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Apple's Q4 Earnings Fall Short

David Gilbert


Apple Earnings Call

To call revenues of £18 billion for a single three-month period "disappointing" is a little disingenuous but considering it Apple we’re talking about, analysts can just about get away with it.

In the last few earnings calls, Apple has consistently outperformed analysts' expectations and so it seems as if Wall Street has cottoned on and boosted expectations for the Q4 results just announced by Apple.

The company sold just over 17 million iPhones during the three months to the end of September, 3m short of the 20m figure expected. The reason for this can be put down to boosted analyst expectations and customers holding out for the launch of the latest iPhone, which went on sale last week.

Apple Earnings Call

These sales will be included in the next quarter’s results and if initial reports are anything to go by, Apple could be back to smashing expectations again in three months time.

However, it was not all doom and gloom for the Cupertino-based company, with the company selling 11m iPads in the period, slightly ahead of expectations. It also sold 4.89m Macs in the three months, a 26 per cent unit increase over the same period last year.

“We are thrilled with the very strong finish of an outstanding fiscal 2011, growing annual revenue to $108 billion and growing earnings to $26 billion,” said Tim Cook, Apple’s CEO. “Customer response to iPhone 4S has been fantastic, we have strong momentum going into the holiday season, and we remain really enthusiastic about our product pipeline.” Cook made reference to the recent death of Steve Jobs saying the co-founder will “forever be the foundation of Apple."

Apple iPhone 4S

The company posted quarterly revenue of $28.27bn and quarterly net profit of $6.62bn, or $7.05 per diluted share. These results compare favourably with the same period last year when it reported revenue of $20.34bn and net quarterly profit of $4.31bn, or $4.64 per diluted share. This is a huge 53 per cent rise in quarterly profits.

However, what was probably the most interesting aspect of the latest earnings call from Apple was its predictions of revenue for next quarter.

According to the company it will have a $37bn quarter with an earnings per share of $9.30, with the calculations based on the boost in iPhone sales expected from the iPhone 4S and the upcoming Christmas period. Considering Apple always underestimates its earnings, we could be looking at a $40bn quarter.

Source: Apple

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