Apple Earnings Boosted From Over 39 Million iPhone Sales

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Apple Inc. (NASDAQ: AAPL) has reported its fourth-quarter earnings. The maker of the iPhone 6 reported earnings of $1.42 per share on revenues of $42.1 billion. Thomson Reuters had consensus estimates of $1.31 in earnings per share and $39.85 billion in revenue. The same quarter for the previous year saw $1.18 in earnings per share and $37.47 billion in revenue.

Apple had previously issued the following quarterly guidance with its earnings report released in July: revenue in a range of $37 billion to $40 billion, gross margin 37% to 38% and a tax rate of 26.1%.

Apple said that gross margin was 38%, versus 37% last year, and international sales were 60% of revenues. The company had a record of $13.3 billion in cash flow from operations, but it spent $20 billion returning capital to shareholders. Product sales were as follows:

  • iPhone was 39.272 million units for revenue of $23.678 billion.
  • iPad was 12.316 million units for $5.316 billion in revenue.
  • Mac was 5.52 million units for $6.625 billion.
  • iTunes/Software/Services revenue was $4.608 billion, up from $4.485 billion in the prior quarter this year and up from $4.26 billion in the fourth quarter of last year.
  • Accessories revenue was $1.486 billion, up from $1.325 billion sequentially and up from $1.319 billion a year ago.

Looking ahead to Apple’s fiscal first quarter, the company gave guidance of $63.5 billion to $66.5 billion in revenues, with gross margin of 37.5% to 38.5% and a tax rate of 26.5%. The Thomson Reuters consensus estimates are $2.40 in earnings per share and $63.52 billion in revenue.

Apple shares closed up 2.1% at $99.76, against a 52-week range of $70.51 to $103.74. Apple’s 50-day moving average was just above the closing price at $99.94. Apple’s consensus price target ahead of earnings was $112.64, but that is likely to change this week.

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All in all, this should have pleased most market watchers. Still, the stock’s initial reaction was up a mere 0.2% at $99.06 in the after-hours trading session on Monday after the report.