Apple earnings rise; iPad shipments fall

The latest Apple results are in, and if you’re an Apple stockholder, there’s reason to rejoice. The company didn’t just post revenue, profit, and gross margin growth compared to the same quarter a year ago; as Reuters reports, Apple also announced $30 billion in additional stock buybacks.

Here are the results for the Mac maker’s second fiscal quarter, which ended on March 29:

  Q2 FY’14 Q1 FY’14 Q2 FY’13
Revenue $45.6 billion $57.6 billion $43.6 billion
Net profit $10.2 billion $13.1 billion $9.5 billion
Gross margin 39.3% 37.9% 37.5%

And here are shipment figures for Apple’s key product lines:

  Q2 FY’14 Q1 FY’14 Q2 FY’13
iPhones 43.7 million 51.0 million 37.4 million
iPads 16.4 million 26.0 million 19.5 million
Macs 4.1 million 4.8 million 4.0 million

Interestingly, iPad sales were down compared to last year. According to Reuters, though, iPhone sales came in substantially above the expectations of Wall Street analysts. On average, the site says, analysts had expected 38 million shipments.

For the ongoing quarter, Apple expects revenue to fall in the $36-38 billion range, with gross margin between 37% and 38%. Those results would be up from $35.3 billion in revenue and a 36.9% gross margin a year ago.

Comments closed
    • beck2448
    • 8 years ago

    Cook has made so many “good enough” statements and his arrogant dismissal of larger smartphones
    reeks of stupidity. Apple engineers would love to be allowed to produce some cutting edge products but the current regime doesn’t see the need. Sad.

    • BloodSoul
    • 8 years ago

    To answer #1 I’ve scored in the 99th percentile on the MCAT… so I think I’ve proven sufficient mastery of the content.

    To answer #2 ideally you learn anything you learn with computers/technology as a supplement. When I’ve needed to, I teach myself something from scratch from the internet and do just fine. My preference is to learn from a professor, use the internet to supplement that knowledge, and then use the internet to test that knowledge and expand it. If you recognize how you are prone to error, you can also use the internet to act as the correcting role of a teacher (a difficult and useful skill).

    • curtisb
    • 8 years ago

    Give the XPS 12’s a look. Dell will let you do a Try & Buy on one…essentially, you configure what you want to test and they’ll send it to you on a 30-day trial basis. If you don’t like it, send it back after the 30 days. If you do, simply cut them a PO (or call with a Credit Card) and purchase the device.

    EDIT: Sorry, just noticed you’ve already looked at them. I’ll leave the info for anyone else interested. The T&B only applies to business/government/education accounts. A single consumer couldn’t do this for a personal purchase.

    • FireGryphon
    • 8 years ago

    The company’s leadership is weaker than before, but let’s face it: Jobs is a hard act to follow. It’ll take some time before someone strong can take the reigns.

    In the meantime, there’s no reason why Apple’s current lineup should be abandoned in the educational space. That’s a matter of support and maintenance, not R&D.

    • FireGryphon
    • 8 years ago

    Laptops are our focus now.

    • Decelerate
    • 8 years ago

    Who says I’m not enjoying an iPad? I have 1st and 3rd gen iPads at home, but usage indicates that I need 1 more device.

    The product always works well initially. The question is whether it stands [i<]well[/i<] the test of time. The 1st iPad doesn't compare well to the 2nd gen (most of my extended family run on iPad 2s). I wholeheartedly agree with Anandtech's articles worrying about long-term performance with the packaged ram.

    • Decelerate
    • 8 years ago

    I need to see those Nexus 7 explosive sales numbers to believe that all the iPad loss went into that device.

    Also, Apple never left [I]niche town[/I]. The iPad had the whole market early on is because an early adopter’s market is a niche market by definition.

    As for the 5C, no objections on that; leaving the touchID out of it was a mistake imo. They needed that feature on it to justify its price point.

    As for new products, I do believe that they have some upcoming, as some of those rumors probably originate from 1 infinite loop…

    • sschaem
    • 8 years ago

    TV no, 4k large format monitor yes. The delay is manufacturing.
    Glasses no, wearable yes. The delay is doing it right at scale.

    Also the iPhone seem to be anything be falling. 43 million unit in 90 days.

    Disclaimer, I don’t own or have any apple products. But that doesn’t stop the world from being googoogaagaa about the brand.

    • sschaem
    • 8 years ago

    Talk is cheap, go put your life saving shorting apple if you are that convinced.

    • sschaem
    • 8 years ago

    Elsewhere as in laptops? Or pockets of administrators?

    • curtisb
    • 8 years ago

    As someone who works in higher education IT, I completely disagree. Technology has more place in the classroom than ever before. We have high-school students in very small rural schools who are taking college-level courses (thse are called “concurrent students”) all through what we call Interactive Educational Television, or IETV (other schools just call it ITV). We do this through the use of Polycom, Tandberg, and LifeSize devices in our traditional classrooms. With the configuration we use, those students are made to feel part of the classroom because they can be addressed directly, respond directly, and participate in class discussions, all without ever leaving the high-school campus. And this costs those students absolutely nothing for up to six hours per semester.

    We do this to 35-45 high schools every semester (the number goes up or down depending on participation).

    We also have a grant that is specifically responsible for testing out the use of new technology in the classroom, and then reporting back to the institution what worked and what didn’t. If something works really well, we make every effort to make these opportunities available to other classes and classrooms. And no, we don’t just waste money just to try something. We’re pretty good at gauging what we think will have a good chance of working, and doing so in an economical manner. Those XPS 12’s are one of the things that came out of that.

    • Shouefref
    • 8 years ago

    I believe you when you say that you’ve learned those things.
    But there are two questions:

    1 did you get a valid certificate which prooves me you have mastered those subjects and that you are a good candidate for a job for which you need that knowledge/training?

    2 even if 1 is “yes”, the question remains whether it is something you need in a class room. I’m also learning languages via computer systems, but I lack the corrections teachers can make to my pronounciation, or to the use of language which cannot be checked by a computer. Eg a computer cannot check whether a letter I have written is written in good language. You need a human teacher, because only human beings have the flexibility to react in a good way to the unpredictable output a question like “write a letter” will produce.

    • BloodSoul
    • 8 years ago

    This would be a completely valid argument… except for the fact that this response is being written by a student that has been able to teach himself every major science discipline, several math courses, and a range of programming languages via a laptop, the internet, and online videos.

    I agree that Apple has not supported tablets properly in an academic setting and that sucks… but to say that tablets for educational purposes are nothing but a marketing trick is sheer ignorance. What if someone had said the same thing about the internet? When the internet first started there was practically nothing on it besides text… it would have been impossible to envision how its use could evolve into what it is today. I would argue that the same is true for tablets. There is no significant use yet simply because the infrastructure within academia hasn’t been in place long enough to evolve. Give tablets 5-10 years in an academic setting and I guarantee you that professors and teachers will be able to come up with incredible things (IE UC Irvine School of Medicine’s iMed ed initiative, etc…).

    • gmskking
    • 8 years ago

    Apple is screwed here soon. People are getting bored with same old stuff. Tablet fad is just about over.

    • derFunkenstein
    • 8 years ago

    Everybody feared intelligent machines, but they were just a clever ploy. Misdirection. Nobody saw coming the jewelry apocalypse. Nobody predicted The Rise of the Earrings!

    • Shouefref
    • 8 years ago

    I didn’t. I guess I’m enormously economic-centred.

    • Shouefref
    • 8 years ago

    Tablets for educational purposes are the same kind of nonsense as that once bleated about computers for educational purposes and before that (remember, check your history) about television and probably before that about radio and cinema too.
    It’s nothing but another marketing trick.

    • curtisb
    • 8 years ago

    They don’t make those model of Latitudes anymore, though. They do have a [url=http://accessories.us.dell.com/sna/productdetail.aspx?c=us&l=en&cs=04&sku=CARTMAL&baynote_bnrank=0&baynote_irrank=0&~ck=baynoteSearch<]newer cart[/url<] for XPS 13's (which I imagine will work with XPS 12's), but it's REALLY expensive. If you already have the cart, they do sell an upgrade kit that's geared towards the XPS 13 Education Edition machines that's much cheaper than purchasing an entire new cart. They also sell other carts from Ergotron, Bretford, and Datamation...which I can't link because they're behind a Dell Premier login, but you can find them at other resellers as well (B&H Photo/Video usually has good prices). We went with one from Datamation and just use wireless on the devices (the classroom already had an access point in it). We purchased an extra set of chargers for the XPS 12's and permanently mounted that set in the cart so the devices could stay on/updated all the time.

    • curtisb
    • 8 years ago

    We use our own image. SCCM has makes this really easy with Task Sequences. I can capture thr OS once and target different software loads for different scenarios in just a few clicks (once the applications/packages are imported into SCCM). Sometimes getting the right mix of drivers can be a pain, but it’s worth it in the long run.

    • Chrispy_
    • 8 years ago

    I never saw any in the flesh, but [url=http://i.dell.com/sites/doccontent/public/solutions/k12/en/Documents/dell-mobile-computing-station.pdf<]this[/url<] always seemed like a great idea for schools. Lockable cabinet for 24 laptops with ethernet and a wireless access point for the room. Need to roll out new software, no problem they can be powered up in the cabinet for re-imaging or other deployment tools because there's active cooling in the cabinet.

    • beck2448
    • 8 years ago

    Apple basically created the smartphone and tablet market, ( I’m not calling a Blackberry a real smartphone by today’s standards), and were very innovative in notebooks as well. Now on every front, competitors are eating market share and designing cutting edge products while Apple, with its huge cash reserves, takes forever to come out with something new. At the moment they’re re not making one halo product, except perhaps the mac Pro, which has its own limitations. This is Tim Cook, Mr.Good Enough bean Counter supreme, and many Apple engineers have expressed frustration at his regime.
    Ipad sales down, Mac sales down, market share down, and the Macbook Pro lineup is anemic. Come on Cook, give customers some high powered supersonic products.
    This is the guy who a year ago said customers don’t want larger phones. Now there are internal Apple memos showing the opposite. Get rid of him and bring in someone with some guts.

    • sweatshopking
    • 8 years ago

    MORE USABLE THAN AN IPAD??!?!? END USER AND DEANJO, CORRECT THIS MAN!!!

    • FireGryphon
    • 8 years ago

    XPS 12s are nice machines, and infinitely more usable. Do you have your own images for them, or do you keep ’em as Dell sends them?

    • albundy
    • 8 years ago

    hah, that’s what the comments are for! flame away!

    • MathMan
    • 8 years ago

    Thank you for not speaking in tongues this time!

    • Auril4
    • 8 years ago

    A financial article in The Tech Report that gets right to the facts without being condescending in any way. Good to see.

    • curtisb
    • 8 years ago

    This. I work in higher education and we were constantly having faculty ask for iPads for the classrooms. When we asked them what they would use them for we usually got “we don’t know, but we need them!”. Fortunately our administration backed us and didn’t cave to the pressure. We recently standardized on Dell XPS 12 convertible ultrabooks…and they’ve been praised since the day we started using them. I personally believe this is because they can use the standard suite of software they are already used to, and do it in both a laptop and tablet format in the same device.

    • FireGryphon
    • 8 years ago

    I wonder how much of the hit in iPads was due to the education sector. For a few years there, schools bought up iPads like mad, ’cause everyone important (parents, politicians) wanted to see technology in the classroom to raise test scores and bridge the achievement gap.

    All the while teachers were in a bit of a bind. Apple provided zero support for finding educational apps for classroom use and didn’t supply any equipment or software for charging mass amounts of iPads or pushing apps to them.

    Today, Apple’s software makes administering a class set of iPads is a nightmare, and third party software doesn’t do much better. Apps are disappointing. There are only 3-4 apps that we use across our entire school, and most of them simply double the function of a reference, like an encyclopedia.

    iPads have great potential, but in the last round of discussions, we decided not to get any more iPads and put our funds elsewhere.

    • End User
    • 8 years ago

    [url=http://www.vox.com/2014/4/23/5645096/why-apple-is-making-its-stock-cheaper<]"Another issue, unstated but perhaps relevant, is that a split could make Apple eligible for inclusion in the Dow Jones Industrial Average."[/url<]

    • End User
    • 8 years ago

    [quote<]Apple may have had more iPhones sold, but that doesn't fix the iPhone 5C[/quote<] My guess is that the iPhone 6 will be sold in two sizes (price will vary with size) with no 5c equivalent. That will take care the 5c problem. Edit: I don't have any evidence that there is a 5c problem. Do you? Apple stated today that the 5c has sold more than its predecessor (and by that I assume they are referring to the 4s after it was replaced by the 5 as the flagship iPhone). [quote<]Rumors say they are working on TV's or watches or glasses, but in truth they seem to have little more than talk and hand waving.[/quote<] The entire computer industry has done nothing but imitate Apple since 1997 and yet all you can do is crap on them for rumoured products they have never talked about. That cracks me up.

    • sschaem
    • 8 years ago

    The potential implication of this stock split:
    [url<]http://www.bloomberg.com/news/2014-04-23/apple-stock-split-removes-obstacle-to-inclusion-in-dow.html[/url<]

    • End User
    • 8 years ago

    While you are waiting for more memory people are enjoying a product that is not suffering from a lack of memory. I can hammer my iPad Air and I have yet to see memory max out (using the Status app). It is kind of freaky how well iOS manages memory.

    • MathMan
    • 8 years ago

    And what would be potentially large implication of a stock split be? Don’t leave us hanging there, man!

    • HisDivineOrder
    • 8 years ago

    And an even greater number of people look at the cost of the iPad lineup and say, “Eh, thanks, but no thanks” and go with a Nexus 7 because there just isn’t that great a difference between the usefulness of an iPad and the Nexus.

    Apple may have had more iPhones sold, but that doesn’t fix the iPhone 5C or diminished interest in paying for the higher premiums of the iPad.

    Apple may find its priced itself back into niche town. In the past, when this happened, they had some new miracle product that would come along and make up for the fact they were falling behind in old hits (ie., iPod, iPhone, iPad), but now… they’re all out of new product ideas.

    Rumors say they are working on TV’s or watches or glasses, but in truth they seem to have little more than talk and hand waving.

    • sweatshopking
    • 8 years ago

    tim cook also opposed it 2 years ago, and said they did nothing for shareholders.

    For the minusers [url<]http://finance.fortune.cnn.com/2014/04/23/when-apples-tim-cook-didnt-like-stock-splits/?source=yahoo_quote[/url<]

    • sschaem
    • 8 years ago

    Not quite. The marketcap doesn’t change, but it does have some large potential implications (in this particular case).

    Now, the ‘crazy’ thing is that S.Jobs would have opposed this move,
    he would have also opposed a dividend (that was raised),
    and would have opposed share buyback (that was increased).

    This quarter clearly is a post S.Jobs report.

    • krazyredboy
    • 8 years ago

    Did anybody else read the headline as “earring,” as opposed to “earning?”

    I was confused for a moment, at the very least…

    • Decelerate
    • 8 years ago

    Hmmm, any dividends announced?

    Edit: Also, for the iPad sales: they should have implemented touchID in the Air. A lot of people wanted that. I wanted more RAM on the iPad mini, and will keep waiting for it.

    • MathMan
    • 8 years ago

    What is so crazy about it?

    It makes the cuts a same sized pie (their market cap) into smaller pieces. It doesn’t change a thing about the actual valuation.

    • druidcent
    • 8 years ago

    Also, they announced a 7-1 stock split!! Crazy!

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