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Topic: Enterprise Software

Apple earnings, 2Q12: $39.2B revenue; 35.1M iPhones sold

Summary: Apple's second quarter earnings are out, and it's a doozy: $39.2 billion revenue with 35 million iPhones and almost 12 million iPads sold.

Andrew Nusca

By for Between the Lines |

Apple's second quarter earnings are out, and it's another doozy: $39.2 billion in revenue and $11.6 billion in profit, with 35.1 million iPhones and 11.8 million iPads sold.

Apple shares were down 11.42 (2 percent) in anticipation of the news, but have now rebounded in after-market trading.

The company posted a unit increase for iPhones of 88 percent year over year; for iPads, 151 percent. The official iPhone numbers exceed analysts expectations considerably -- they had predicted somewhere around 30 million -- but iPad numbers didn't quite meet expectations, coming in about a million units short.

Sales for Macs came in at about 4 million units, a 7 percent increase; iPods, 7.7 million, a 15 percent unit decline.

What you need to know:

  • Gross margin came in at a whopping 47.4 percent. That's in contrast to the already-formidable 41.4 percent in the year-ago quarter.
  • International sales accounted for 64 percent of the quarter’s revenue.
  • 3Q12 outlook: $34 billion in revenue, diluted earnings per share of $8.68.

What it all means:

  • Apple remains a tremendously strong company, financially, and is still reaping the benefits from its popular iPhone 4S as it rolls out across the globe -- including China.
  • The iPad posted great gains, but it may have been hindered a bit by its release on March 16, which didn't give it quite as much time to gain traction.
  • Macs are holding steady in anticipation of a Pro refresh.
  • The iPod continues to erode as the iPhone takes its place.

But that's the short-term view; the long-term view is more interesting. Aside from a bumpy road immediately ahead -- the third-quarter is no friend to many tech companies -- you've got to wonder how long Apple can ride the iPhone train.

There's already talk of an iPhone 5, sure, but what's more pressing is how much slack there is left in the smartphone market. While profits from existing iPhone users who upgrade every couple of years (and Android users who switch) aren't to be discounted, the real action is in the far-flung places where feature phones still rule, and where smartphone manufacturers haven't yet made converts. It's those battles that Apple needs and is poised to win, and where momentum can be continued.

Topics: Enterprise Software, Apple, Banking, iPhone, Mobility

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43 comments
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  • You ZDNet guys crack me up!

    "What it all means:
    Apple remains a tremendously strong company, financially..."

    Ya think? Apple is the most powerful, financially sound, stable, growth-oriented, customer-satsifying company in the history of humanity. Tremendously strong is, I suppose, tastefully understated but really, guys, get your heads out. Can't wait to see what Ed Nott has to say about this! LOL
    mlindl
    Reply Vote

    • Ok, sure.

      [i]Apple is the most powerful, financially sound, stable, growth-oriented, customer-satsifying company in the history of humanity[/i]

      Sure. Get back to us when Apple's been around as long as companies Like General Electric, ect. Companies diversified in everything from Trains, planes, lighting, ect.

      Then maybe we'll talk. ;)
      William Farrel
      Reply Vote

      • Like Eastman Kodak?

        The world has changed. Apple probably won't be on top in 50 years, but that doesn't mean it won't be a powerhouse for another decade or two. What more do you want? If you want a company "diversified in everything from Trains, planes, lighting, ect. (sic)" try Berkshire Hathaway.
        gfeier
        Reply Vote

      • gfeier, that is my point

        mlindl was making light of the fact that the blogger (and some analysts) concearns on - [i]the long-term view is more interesting. Aside from a bumpy road immediately ahead the third-quarter is no friend to many tech companies youve got to wonder how long Apple can ride the iPhone train.[/i]

        Kodak wasn't diversified enough when the world changed. a company like GE is. If train sales dropped, they had aircraft engines to sell. As electronics became a much more crowded field, they sold it, and made money from Appliances. If that gets squeezed, they have their medical imaging division.

        Diversified.

        I begrudge Apple nothing, (I have them in my retirement portfolio, as I'm sure many do) but all it takes is a shift in consumer spending, maybe not upgrading their phones (or carriers dropping them?) to change the fortunes of a company that relies on three similar products to carry the day - MP3 Players, Cell Phones, and tablets.

        Much like Kodak -Film, Cameras, Photo Chemicals. (They did diversify a bit, but never managed, or capitalized right, on whan the had, which was their downfall. Eastman Chemical is a Fortune 500 company, believe it or not.)

        I'm not saying that Apple won't make some good strategic moves in the future, to ensure their long term viability, I'm just not looking at them like the Second Coming of Christ, like some people do. :)
        William Farrel
        Reply Vote

      • As a shareholder in GE...

        let me tell you, it ain't doing that good. Nearly 50% below it's price 4 years ago.
        msalzberg
        Reply Vote

      • Diversified?

        Well, Apple started out changing the computer and software businesses, way back with their Apple ][. And then they dabbled in the music business, shaking that old line industry up a bit. Then they have moved into the phone business some. And, the internet / 'cloud' arena. On, yeh, they are on the way to revolutionizing the computer business, again by moving the world to tablets. Then, there's TV, movies, books, education, retailing... Did I forget anything?

        No, Apple isn't one of those 'diversified' companies. Really no future there at all.
        z2217
        Reply Vote

    • Hey now!

      If you're familiar with my writing, you'd know that I don't indulge in the hysteria that the rest of the tech press enjoy while writing about Apple products.

      (P.S. If "very great in amount, scale, or intensity" or "extremely good or impressive; excellent" is too understated for you, well, please submit your complaint to the 600 million people across the world perpetuating this lingual atrocity.)
      andrew.nusca
      Reply Vote

      • Were you listening?

        Andrew, if you had only been listening to the Apple earnings conference call and paid just a bit of attention, you would have immediately picked up on the correct terms:

        ... these _____ results were just incredible...

        ... the extraordinary thing about Apple's ____ in the ___ market is ...

        ... the market acceptance of Apple's ____ has been just unbelievable...

        and so forth. It is never correct to use conventional superlatives when discussing anything Apple. Didn't they teach you that?
        z2217
        Reply Vote

    • Think like Tim Cook thinks...

      About two keynotes ago - during the iPhone 4S intro - Tim Cook pointed out that Apple believes the entire handset market (1.5 billion units a year) will eventually ALL be smart phones, like iPhone. Apple dominates the mp3 music player market (78%), and they dominate the tablet market (70%). So, what do you imagine Tim Cook's plans look like for Apple products in the phone market? Can Apple really sell a billion iPhones a year? Bet me.

      And, speaking of tablets, by 2015 - just three years from NOW - tablet sales are expected to exceed PC sales, world wide. Does anyone imagine that Apple intends to give away their dominance of this market? Can Apple really sell 200 million iPads a year?

      And remember, Apple is doing as well as they are, not because they don't have competition. Apple is winning because they consistently out innovate, out market, out execute and out deliver every other technology company of any size out there. And, they have been doing this for a long, long time.

      Hurry, I think you can still get tickets to the big wake in Redmond...
      z2217
      Reply Vote

  • That's right. How long can they ride this train?

    Any day now, Apple is doomed!
    dhmccoy
    Reply Vote

    • LOL!

      agreed.
      William Farrel
      Reply Vote

      • Wow.

        So what, no sarcasm allowed?
        William Farrel
        Reply Vote

  • Apple becomes more and more international

    Five years ago, only 40% of Apple's sales were international.

    Year ago, 60% of sales were international.

    Now 64% of sales are international. And among 35 million iPhones sold, only 10 million are sold in the USA.
    DDERSSS
    Reply Vote

    • NO NO NO!! Apple only does well in the United States!

      Where the consumer is spoiled and selfish purchasing only to show off and not considering true VALUE! Out side the US where consumers have higher standards they have no time for Apple nor it's products! Get it?

      Pagan jim
      James Quinn
      Reply Vote

      • And dont forget we keep hearing how Europe has better carriers,

        yet over 60% of LTE traffic comes from the US. This time it was US carriers who were first to get new technology up and running on a large scale.

        Bet we'll never read about that here either...
        otaddy
        Reply Vote

    • Apple becomes more and more international

      So are you saying that's a bad thing, a good thing or just repeating statistics?
      gribittmep
      Reply Vote

    • of course it does

      There is real room for growth only in the new markets. Market share for a single product regardless of how cool it is is limited. People simply wont buy something such personal as mobile phone because somebody they know already has this model. Uniform is not cool. Being different is what Apple itself suggests...so...
      polarcat
      Reply Vote

    • then they don't need US taxpayers to subsidize them

      Justify that double-standard...
      HypnoToad72
      Reply Vote

  • Apple earnings, 2Q12: $39.2B revenue; 35.1M iPhones sold

    [i]The official iPhone numbers exceed analysts expectations considerably ??? they had predicted somewhere around 30 million[/i]
    Same thing every quarter, analysts always low ball Apple so that when the earnings can come out it it makes it look like Apple did so much better and drive the stocks up.

    [i]but iPad numbers didn???t quite meet expectations, coming in about a million units short.[/i]
    Finally, the death of the tablet is upon us. I was right all along about the tablet fad, go me!
    Loverock Davidson-
    Reply Vote

    • Sotto Voce

      Because 151% year over year growth is the clear sign of an ended fad.

      A quarter in which an anticipated refresh was available for the last 15 of 92 days.

      I think that's a bit of a Clemens obit. you got going there Mr. D.
      DannyO_0x98
      Reply Vote
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