Apple blows out Q1 earnings, revenue grows 30%, though iPad sales continue to slump
iPad sales were 21.4 million units, below both 2012 and 2013, but iPhone sales went through the roof, with Apple selling 74.4 million units
The holiday season proved to be profitable for Apple as iPhone 6 sales went through the roof, leading to yet another record quarter of profits. Apple after the bell reported revenue of $74.6 billion, with net income of $18 billion. That revenue level represents a 30 percent growth over Q1 2014 (that would be the final quarter of the calendar year 2013).
Also up were iTunes sales which now drives $4.6 billion in revenue for the company (software, apps, media).
While revenue grew dramatically in China (70 percent), revenue was up impressively across the board. For instance, revenue was up 23 percent in the Americas, and 20 percent in Europe. Apple stock rose over 5 percent in after hours trading (I should think so). Like other tech stocks, Apple closed lower today, as investors reacted to disappointing earnings from Microsoft.
But iPad sales continue to be a concern for Apple, and by extension, digital publishers. Apple reported that the sold 21.419 million iPad units in its Q1 2015 fiscal year which includes the holiday shopping season, down 18 percent.
This is now the fourth straight quarter that iPad sales were less than the same quarter the year before. Even more concerning – at least for those of us who see digital edition sales somewhat tied to iPad sales – is that sales were even down versus the same quarter in 2012.
The question for Apple now is whether they stay committed to the iPad (I think they will) and possibly use the same strategy for their tablet, introducing a larger model in 2015. Apple has sold nearly 250 million iPads since its introduction in April of 2010.
iPhone sales were, however, ridiculous: 74.468 million, blowing past all previous quarters, up 46 percent. Unlike previous iPhone introductions, Apple launched two models that could both lure current iPhone owners looking to upgrade, and non-iPhone owners who were looking to a larger model. That strategy worked… big time. That drove iPhone revenue up 57 percent as some buyers went for the larger, and more expensive, iPhone 6 Plus.
Mac sales came in as expected, 5.5 million units – a good number as the company sold 4.8 million Macs a year ago (two of those Macs I bought, do I get a bonus or something? How about Apple’s press team returning my phone call once this year?).
During the conference call, Apple CEO Tim Cook said the Apple Watch will begin shipping in April. Also, Apple’s board of directors declared a cash dividend of $.47 per share of the company’s common stock, payable on February 12, 2015, to shareholders of record as of the close of business on February 9, 2015.