Apple 2Q12 earnings: What you need to know

Apple 2Q12 earnings: What you need to know

Summary: Apple sold a record 35.1 million iPhones and 11.8 million iPads in the March quarter and enjoyed a 94 percent increase in net profits year-over-year.

TOPICS: Banking, Apple

Apple Inc.'s (NASDAQ:AAPL) 2012 second quarter earnings included record sales of iPhones, iPads and Macs and a 94 percent increase in net profits year-over-year.

Highlights for the March quarter include:

  • $39.2B in revenue
  • $11.6 billion net quarterly profit (or $12.30 per diluted share)
  • 47.4 gross margin
  • 64 percent international sales
  • 35.1M iPhones sold (88 percent unit increase)
  • 11.8 million iPads sold (151 percent unit increase)
  • 4 million Macs sold (7 percent unit increase)
  • 7.7 million iPods (15 percent unit decrease)

Apple added about 12% to its liquid marketable assets (which includes cash, short-term investments and long-term marketable securities) bringing its total to around $110 billion or about $116.60 per share. Apple's cash is up about 67% compared to a year ago and it has more than doubled over two years.

AAPL cash on balance sheet 2Q12 - Jason O'Grady

Investors seem to be pleased with the results, and AAPL shares are up 43.53 (7.77%) in after hours trading to $603.81.

AAPL +43.53 (7.77%) in after hours trading to $603.81 - Jason O'Grady

If you missed it, you can listen to and read about Apple's 2Q 2012 financial results here:

Topics: Banking, Apple

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  • Great news no doubt and being an Apple fan I enjoy this

    kind of stuff to no end. However that said does every person on ZDNet have to write an article about a quarterly report? After all this is the second one I've read and I've no doubt that there will be more such articles over the next few days. How many times can we rehash these number and put a new spin on them?

    Pagan jim
    James Quinn
    • Quarterly earnings

      You missed the point... we are CELEBRATING this magnificent achievement!
      contrary to government, every dollar you see here represents happy customers who FREELY traded their money for items of higher value that enrich their lives and help them. Apple's success is to be applauded and admired. They have indeed changed the world for the better.
      Stuart Toomey
      • Changed the world for the better

        No doubt that Apple is probably the most successful company today. But, Apple changing the world for the better, I doubt it. I would say they made it easier to use smartphones and tablets to some respect. Inventing the automobile, computer, and the internet has changed the world for the better (or maybe for the worst).
  • These results demonstrate a critical point:

    Many analysts have worried about whether Apple might lose momentum without Steve. It's clear that Steve left a legacy greater than his dreams - a dream team.

    Rarely mentioned is what may be his greatest last gift to the company, shareholders and customers: Apple University, the formal internal education system he spent his last days assuring a future beyond his own. Steve was a great student of many systems. One, I am sure, was Ray Croc's "Hamburger U," which assured a continuing transfer of values to generations of future franchisees. The other, I am sure, was an appreciation of what Xerox did wrong at PARC, and Morita did wrong at Sony. If I remember correctly, the first Apple store opened the week Gateway closed the last of its stores. Has anyone checked out the Microsoft store lately? Anyone count the people in line to get the new Nokia Windows phone?

    Steve left a legacy that will continue to "amaze" for years.
    • The Microsoft store seemed quite busy

      according to my brother who was in one last weekend near him.

      And the Cyan Windows phone is sold out at Amazon and in stores. Though when I was at the Verizon store near me last Tuesady, no one was in line for anythin, so I'm not sure what you where trying to imply there?
      William Farrel
      • Windows Phone Sold Out

        Its easy to sell out of something if you only make a small number of them. I haven't seen hard sales figures for the new Nokia.
  • Apple s Reported Quarterly earnings appear to be Fraudulent.

    The reported earnings claimed by Apple are frankly unbelievable. They want the investors to believe that 35.1 million Iphones were sold in the last Quarter and of course the majority of the iphones were not sold in the United States but overseas. I wonder who is verifying all the millions of Iphone sales that Apple???s is alleging occurred during the last quarter. Definitely not The Security Exchange Commission. It amazes me the short term memory of the public. Less than 4 years ago Wall Street was tanking due to mass corruption. Its apparent nothing has changed. Fortunately, the Government intervened along with the Fed Reserve and bailout though WHITE COLLAR THEIEFS.

    To give you an idea, why I think the reported earnings are fraudulent it would required that four Iphones were sold every second in every day or approximately 358,163 each day of the quarter which is 98 days. The last available information on iphone production was in September of 2010 when Apple was producing a 137,000 iphone per day. Not only does Apples Sales jump by 88% a year it can miraculously increase its production by 210% in a year and half and have not any cost associated with the new production as its net earnings increased by 11% to 31% in its last astonishing Quarterly report. That is interesting as 2011 net income was 20%, I guest Apple has already paid for all recently built factories in China. It is unbelievable you could said it???s a miracle are possible even lies.

    Apple???s alleged Iphone sales are almost greater than the population of California. I am sure Apples next Quarter sales will be greater than the population of California and possible the United States which has a population of 311,591,917, considering its past phenomenal growth rate.
    Who knows in ten years every single person in the whole wide world will have a Iphone, and guess what the price will never be lowered as the demand will never cease, especially when all though extraterrestrial aliens start purchasing though high tech iphones. The Universe is a Big place Brother, Apple will be able to sell Iphones forever. Hey, I just realized the Apple corporation maybe God, it certainly has had many miracles in the last couple years.

    You just have to believe. Keep the faith brethren, Apple stock is going to $1000 per share for sure, maybe by next month. What does Cramer say: Buy-Buy-Buy Buy-Buy-Buy!!!! I know his name is Jim but I think he should change it to Richard so I could call him by the nick name which better describes him which would be Dick.

    I am back; I think that???s what ET said. Sorry, but I haven???t finish my comments, that is if you are still with me and not getting mad, I recently received malicious remarks regarding my other commentary on Apple Capitalization and Stock Price. It kind of makes me feel unappreciated.

    So let???s now investigate where the majority of the Iphones were sold in the last Quarter and why Apple???s Next Quarter guidance is ultra-conservative. The second part of the investigation can be easily discovered as Apple???s recent earnings and profit are definitely fabrications. Its likely Apple???s prior earnings reports are also inaccurate due to the astonishing growth rate. I don???t want to offend anybody and call them lies but when it looks like a Duck and quacks like a duck it???s a Duck, my Friends.

    I did a little research since the analysts say the majority Apple???s expanding earnings will be achieved in third world countries that are economically rising with the help of Wall Street and the Apple Corporation of course. As I recall Apple does not manufacture any devices in the United States anymore. Ultimately, who has control of the tremendous factories which were built by American corporations in China which is a Communist Nation? Do you actually think apple has full control of its factories in China? I think Apple's Manufacture is called Falcon. That Discussion is for another day.
    The manufacturing capabilities of the United States has been diminishing for the last 30 years and we are left with an economy which produces bubble after bubble to provide an illusion of prosperity to all the masses or may just a few, if you are in the right circles that is. However, I think the geniuses on Wall Street say we think they work. We will see how that turns out in coming years.

    Back to the third world and the per captia income which is published by Wikipedia. You can check to make sure I did not misrepresent or make any errors.

    Country POPULATION Per captia income
    US Currency
    China 1,347,350,000 19.22% 5,414
    India 1,210,193,422 17.27% 1,389
    Indonesia 237,641,326 3.39% 3,509
    Brazil 192,376,496 2.74% 12,789
    Pakistan 179,381,000 2.56% 1,201
    Nigeria 162,471,000 2.32% 1,490
    Bangladesh 142,319,000 2.03% 678
    Mexico 112,336,538 1.60% 10,153
    Philippines 92,337,852 1.32% 2,223
    3,676,406,634 52.45 4,316 Average

    According to the various internet sites the iphone 4 is more expensive in these third world countries than in the United States. These countries general population do not have the income to buy a 8G Iphone selling for $788.00 which would take the typical person in China almost two months of income to buy. I don???t think the typical person in China is going to buy the Iphone, especially when there are cheaper alternative smart phones with similar capabilities. Forget about India???s general population buying an Iphone. Possibly, Brazil and Mexico, but in the millions, I don???t think so unless the Iphone price is significantly lowered. The other nation are a no sell, the population cannot afford the cost of the overprice iphone, which it has to be if Apple is producing 350,000 or more units daily. According to Apple???s recent financial statement, this amount of Iphone is being manufactured.

    This leaves the more affluent people of these nations to buy all the millions of iphones which Apple is manufacturing every quarter. Just as the wealth in the United States has been polarized so has the World's wealth with 2% of the World population owning more than half of global household wealth.

    Considering 64% of Apple???s earnings came from international sales or about 24.5 million iphones, How many people are left in these third world countries that can afford to buy an Iphone? Just look at the annual per capita income of these countries. Hopefully, you will get the picture that Apple has to lower the cost of its product to significantly capture more market share and grow its sales. The market base has to be shrinking considering the unbelievable quantity of iphone sold this last quarter. Who is going to buy the millions of iphone coming into the market without a price cut? Maybe you can tell me.
    Which brings be to my last thought, which I am sure you are glad. When is an audit going to be conducted on Apple to verify their Quarterly reports are not just smoke and mirrors? Don???t be surprised if Apple earnings for this quarter get revised downward. I wouldn???t be.

    Before you make any ignorant comments I do not have any Apples shares.
    • Before you make any ignorant comments...

      oops. Too late.