Apple breaks records for fiscal Q2 with strong iPhone, Mac sales

Apple logoUnexpected strength in Mac sales along with the previously-predicted strong staying power of the iPhone 6 line has helped Apple see record-breaking performance for a fiscal second quarter this year. The company sold more than 61.17 million iPhones, about 80 percent of the number sold during the holiday quarter, which is usually followed by a drop of about 40 percent. Macs sold 4.56 million units, another record for a fiscal Q2 and up 10 percent year-over-year.

The iPad decline has continued, but is still selling in impressive numbers. Apple moved some 12.6 million units (though actually reported 13.7 million in terms of sell-through), far better than consensus predictions. The company refused to release any figures on the Apple Watch, but said that the two week of sales for the refreshed 13-inch MacBook Pro and MacBook Air helped boost notebook numbers. The all-new 12-inch Retina MacBook came out after the quarter was over, and thus will need to wait until fiscal Q3 for analysts to discover if the new model will grow Apple's somewhat-unexpected sales momentum.

Apple reported revenue of $58.01 billion in revenue, up nearly $13 billion from a year ago, largely due to continued growth in China, which has leapt 71 percent year-over-year. Revenue from the iPhone alone was $13.57 billion, up $3.3 billion from the year-ago quarter. Gross margin increases also helped, with an average of 40.8 percent compared to 39.3 percent a year ago. Overall, revenue grew 27 percent, while earnings per share reached $2.33, an increase of 40 percent.

The strong Mac performance is thus credited to a "halo" effect from the enormous number of iPhone and iPad sales Apple has generated in the past few quarters, along with a 31 percent year-over-year growth in Mac sales in China. While the Mac performance is on par with most recent quarters, the second quarter traditionally sees a significant drop in all categories, following the shopping explosion of the holiday season, and thus some analysts believe that Mac sales will increase in the second half of the year on the back of predicted announcements regarding a 15-inch MacBook Pro, a possible refresh of the Mac Pro, and the popularity of the recently-announced MacBook line.

The iPad decline was less than expectations, but is still more than four million short of the number Apple sold a year ago. Sales of the iPhone and iPad are predicted to drop significantly next quarter and the one following, as buyers begin to anticipate the likely new models, expected to debut in October this year. Cook even mentioned, in one of the few hints at future plans, that while cannibalization of iPad sales is real and caused nearly entirely by the company's other products (such as the lighter MacBook and the larger iPhones) that inventory and sales levels will "stabilize at some point" and that the market -- whether in the US or elsewhere -- isn't saturated. Future models and enterprise adoption, Cook hinted, will return the iPad to a growth pattern.

For the next quarter, Apple is expecting revenue between $46 billion and $48 billion, with gross margin of between 38.5 and 39.5 percent. Operating expenses are expected to fall between $5.65 and $5.75 billion, and the company is expecting a tax rate of 26.3 percent. Apple Chief Financial Officer Luca Maestri noted that the lower gross margin is related to the learning process of delivering the Apple Watch to consumers, as well as financial challenges imposed by "currency exchange headwinds," thanks to a much stronger US dollar.

Source: Electronista

Tags: Apple, report

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