Strong iPhone, Mac & App Store Sales Drive Record
September Quarter Revenue & Earnings
Apple® today announced financial results for its fiscal 2014
fourth quarter ended September 27, 2014. The Company posted
quarterly revenue of $42.1 billion and quarterly net profit of $8.5
billion, or $1.42 per diluted share. These results compare to
revenue of $37.5 billion and net profit of $7.5 billion, or $1.18
per diluted share, in the year-ago quarter. Gross margin was 38
percent compared to 37 percent in the year-ago quarter.
International sales accounted for 60 percent of the quarter’s
revenue.
Apple’s board of directors has declared a cash dividend of $.47
per share of the Company’s common stock. The dividend is payable on
November 13, 2014, to shareholders of record as of the close of
business on November 10, 2014.
“Our fiscal 2014 was one for the record books, including the
biggest iPhone launch ever with iPhone 6 and iPhone 6 Plus,” said
Tim Cook, Apple’s CEO. “With amazing innovations in our new
iPhones, iPads and Macs, as well as iOS 8 and OS X Yosemite, we are
heading into the holidays with Apple’s strongest product lineup
ever. We are also incredibly excited about Apple Watch and other
great products and services in the pipeline for 2015.”
“Our strong business performance drove EPS growth of 20 percent
and a record $13.3 billion in cash flow from operations in the
September quarter,” said Luca Maestri, Apple’s CFO. “We continued
to execute aggressively against our capital return program,
spending over $20 billion in the quarter and bringing cumulative
returns to $94 billion.”
Apple is providing the following guidance for its fiscal 2015
first quarter:
• revenue between $63.5 billion and $66.5 billion
• gross margin between 37.5 percent and 38.5 percent
• operating expenses between $5.4 billion and $5.5 billion
• other income/(expense) of $325 million
• tax rate of 26.5 percent
Apple will provide live streaming of its Q4 2014 financial
results conference call beginning at 2:00 p.m. PDT on October 20,
2014 at www.apple.com/quicktime/qtv/earningsq414. This webcast will
also be available for replay for approximately two weeks
thereafter.
This press release contains forward-looking statements including
without limitation those about the Company’s estimated revenue,
gross margin, operating expenses, other income/(expense), and tax
rate. These statements involve risks and uncertainties, and actual
results may differ. Risks and uncertainties include without
limitation the effect of competitive and economic factors, and the
Company’s reaction to those factors, on consumer and business
buying decisions with respect to the Company’s products; continued
competitive pressures in the marketplace; the ability of the
Company to deliver to the marketplace and stimulate customer demand
for new programs, products, and technological innovations on a
timely basis; the effect that product introductions and
transitions, changes in product pricing or mix, and/or increases in
component costs could have on the Company’s gross margin; the
inventory risk associated with the Company’s need to order or
commit to order product components in advance of customer orders;
the continued availability on acceptable terms, or at all, of
certain components and services essential to the Company’s business
currently obtained by the Company from sole or limited sources; the
effect that the Company’s dependency on manufacturing and logistics
services provided by third parties may have on the quality,
quantity or cost of products manufactured or services rendered;
risks associated with the Company’s international operations; the
Company’s reliance on third-party intellectual property and digital
content; the potential impact of a finding that the Company has
infringed on the intellectual property rights of others; the
Company’s dependency on the performance of distributors, carriers
and other resellers of the Company’s products; the effect that
product and service quality problems could have on the Company’s
sales and operating profits; the continued service and availability
of key executives and employees; war, terrorism, public health
issues, natural disasters, and other circumstances that could
disrupt supply, delivery, or demand of products; and unfavorable
results of other legal proceedings. More information on potential
factors that could affect the Company’s financial results is
included from time to time in the “Risk Factors” and “Management’s
Discussion and Analysis of Financial Condition and Results of
Operations” sections of the Company’s public reports filed with the
SEC, including the Company’s Form 10-K for the fiscal year ended
September 28, 2013, its Form 10-Q for the quarter ended December
28, 2013, its Form 10-Q for the quarter ended March 29, 2014, its
Form 10-Q for the quarter ended June 28, 2014, and its Form 10-K
for the fiscal year ended September 27, 2014 to be filed with the
SEC. The Company assumes no obligation to update any
forward-looking statements or information, which speak as of their
respective dates.
Apple designs Macs, the best personal computers in the world,
along with OS X, iLife, iWork and professional software. Apple
leads the digital music revolution with its iPods and iTunes online
store. Apple has reinvented the mobile phone with its revolutionary
iPhone and App Store, and is defining the future of mobile media
and computing devices with iPad.
NOTE TO EDITORS: For additional information visit Apple’s PR
website (www.apple.com/pr), or call Apple’s Media Helpline at (408)
974-2042.
© 2014 Apple Inc. All rights reserved. Apple, the Apple logo,
Mac, Mac OS and Macintosh are trademarks of Apple. Other company
and product names may be trademarks of their respective owners.
Apple Inc.
UNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(In millions, except number of shares
which are reflected in thousands and per share amounts)
Three Months Ended
Twelve Months Ended
September 27,2014
September 28,2013
September 27,2014
September 28,2013
Net sales $ 42,123 $ 37,472 $ 182,795 $ 170,910 Cost of
sales (1) 26,114 23,601 112,258 106,606
Gross margin 16,009 13,871 70,537
64,304 Operating expenses: Research and development (1)
1,686 1,168 6,041 4,475 Selling, general and administrative (1)
3,158 2,673 11,993 10,830 Total
operating expenses 4,844 3,841 18,034
15,305 Operating income 11,165 10,030 52,503 48,999 Other
income/(expense), net 307 113 980 1,156
Income before provision for income taxes 11,472 10,143 53,483
50,155 Provision for income taxes 3,005 2,631
13,973 13,118 Net income $ 8,467 $ 7,512 $ 39,510 $ 37,037
Earnings per share: Basic $ 1.43 $ 1.19 $ 6.49 $ 5.72
Diluted $ 1.42 $ 1.18 $ 6.45 $ 5.68 Shares used in computing
earnings per share: Basic 5,933,845 6,329,139 6,085,572 6,477,320
Diluted 5,972,082 6,363,919 6,122,663 6,521,634 Cash
dividends declared per common share $ 0.47 $ 0.44 $ 1.82 $ 1.64
(1) Includes share-based compensation expense as follows:
Cost of sales $ 116 $ 88 $ 450 $ 350 Research and development $ 314
$ 209 $ 1,216 $ 917 Selling, general and administrative $ 332 $ 258
$ 1,197 $ 986
Apple Inc.
UNAUDITED CONDENSED CONSOLIDATED
BALANCE SHEETS
(In millions, except number of shares
which are reflected in thousands and par value)
September 27,2014
September 28,2013
ASSETS: Current assets: Cash and cash equivalents $
13,844 $ 14,259 Short-term marketable securities 11,233 26,287
Accounts receivable, less allowances of $86 and $99, respectively
17,460 13,102 Inventories 2,111 1,764 Deferred tax assets 4,318
3,453 Vendor non-trade receivables 9,759 7,539 Other current assets
9,806 6,882 Total current assets 68,531 73,286
Long-term marketable securities 130,162 106,215 Property, plant and
equipment, net 20,624 16,597 Goodwill 4,616 1,577 Acquired
intangible assets, net 4,142 4,179 Other assets 3,764
5,146 Total assets $ 231,839 $ 207,000 LIABILITIES
AND SHAREHOLDERS’ EQUITY: Current liabilities: Accounts
payable $ 30,196 $ 22,367 Accrued expenses 18,453 13,856 Deferred
revenue 8,491 7,435 Commercial paper 6,308 0 Total
current liabilities 63,448 43,658 Deferred revenue –
non-current 3,031 2,625 Long-term debt 28,987 16,960 Other
non-current liabilities 24,826 20,208 Total
liabilities 120,292 83,451 Commitments and
contingencies Shareholders' equity: Common stock and
additional paid-in capital, $0.00001 par value: 12,600,000 shares
authorized; 5,866,161 and 6,294,494 shares issued and outstanding,
respectively 23,313 19,764 Retained earnings 87,152 104,256
Accumulated other comprehensive income/(loss) 1,082
(471) Total shareholders' equity 111,547 123,549
Total liabilities and shareholders' equity $ 231,839 $ 207,000
Apple Inc.
UNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In millions)
Twelve Months Ended September 27, 2014
September 28, 2013 Cash and cash equivalents,
beginning of the year $ 14,259 $ 10,746 Operating
activities: Net income 39,510 37,037 Adjustments to reconcile net
income to cash generated by operating activities: Depreciation and
amortization 7,946 6,757 Share-based compensation expense 2,863
2,253 Deferred income tax expense 2,347 1,141 Changes in operating
assets and liabilities: Accounts receivable, net (4,232) (2,172)
Inventories (76) (973) Vendor non-trade receivables (2,220) 223
Other current and non-current assets 167 1,080 Accounts payable
5,938 2,340 Deferred revenue 1,460 1,459 Other current and
non-current liabilities 6,010 4,521 Cash generated by
operating activities 59,713 53,666 Investing
activities: Purchases of marketable securities (217,128) (148,489)
Proceeds from maturities of marketable securities 18,810 20,317
Proceeds from sales of marketable securities 189,301 104,130
Payments made in connection with business acquisitions, net (3,765)
(496) Payments for acquisition of property, plant and equipment
(9,571) (8,165) Payments for acquisition of intangible assets (242)
(911) Other 16 (160) Cash used in investing activities
(22,579) (33,774) Financing activities: Proceeds from
issuance of common stock 730 530 Excess tax benefits from equity
awards 739 701
Taxes paid related to net share settlement
of equity awards
(1,158) (1,082) Dividends and dividend equivalents paid (11,126)
(10,564) Repurchase of common stock (45,000) (22,860) Proceeds from
issuance of long-term debt, net 11,960 16,896 Proceeds from
issuance of commercial paper, net 6,306 0 Cash used in
financing activities (37,549) (16,379)
Increase/(decrease) in cash and cash equivalents (415) 3,513
Cash and cash equivalents, end of the year $ 13,844 $ 14,259
Supplemental cash flow disclosure: Cash paid for income taxes, net
$ 10,026 $ 9,128 Cash paid for interest $ 339 $ 0
Apple
Inc. Q4 2014 Unaudited Summary Data (Units in thousands,
Revenue in millions)
Q4'14 Q3'14 Q4'13 Sequential
Change Year/Year Change Operating Segments
Revenue Revenue
Revenue Revenue
Revenue Americas $16,247 $14,577 $13,941 11%
17% Europe 9,535 8,091 8,005 18% 19% Greater China 5,778 5,935
5,733 - 3% 1% Japan 3,507 2,564 3,341 37% 5% Rest of Asia Pacific
1,923 2,161 1,980 - 11% - 3% Retail 5,133 4,104 4,472 25% 15%
Total Apple $42,123 $37,432
$37,472 13% 12%
Q4'14 Q3'14 Q4'13 Sequential Change
Year/Year Change Product Summary
Units Revenue
Units Revenue
Units Revenue
Units Revenue
Units Revenue iPhone (1)
39,272 $23,678 35,203 $19,751 33,797 $19,510 12% 20% 16% 21% iPad
(1) 12,316 5,316 13,276 5,889 14,079 6,186 - 7% - 10% - 13% - 14%
Mac (1) 5,520 6,625 4,413 5,540 4,574 5,624 25% 20% 21% 18% iPod
(1) 2,641 410 2,926 442 3,498 573 - 10% - 7% - 24% - 28%
iTunes/Software/Services (2) 4,608 4,485 4,260 3% 8% Accessories
(3) 1,486 1,325 1,319 12% 13%
Total Apple
$42,123 $37,432 $37,472 13% 12%
(1)
Includes deferrals and amortization of
related non-software services and software upgrade rights.
(2)
Includes revenue from the iTunes Store,
the App Store, the Mac App Store, the iBooks Store, AppleCare,
licensing and other services.
(3)
Includes sales of Apple-branded and
third-party accessories for iPhone, iPad, Mac and iPod.
ApplePress:Kristin Huguet,
408-974-2414khuguet@apple.comorInvestor Relations:Nancy Paxton,
408-974-5420paxton1@apple.comJoan Hoover,
408-974-4570hoover1@apple.com
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