Apple on Tuesday announced financial results for its fiscal 2013 second quarter ended March 30, 2013. As expected, sales of the company’s products decreased compared to the first quarter of fiscal 2013, but not as significantly as it was expected. Moreover, despite of those decreased the company managed to report a record second quarter revenue amid lower profit than in the same period a year ago due to a massive decline in profit margin.
The company posted quarterly revenue of $43.6 billion and quarterly net profit of $9.5 billion, or $10.09 per diluted share. These results compare to revenue of $39.2 billion and net profit of $11.6 billion, or $12.30 per diluted share, in the year-ago quarter. Gross margin was 37.5% compared to 47.4% in the year-ago quarter. International sales accounted for 66% of the quarter’s revenue.
“We are pleased to report record March quarter revenue thanks to continued strong performance of iPhone and iPad. Our teams are hard at work on some amazing new hardware, software, and services and we are very excited about the products in our pipeline,” said Tim Cook, chief executive officer of Apple.
The company sold 37.4 million iPhones in the quarter, compared to 35.1 million in the year-ago quarter, an increase of around 7%.
Sales of Apple smartphones dropped by around 10 million in one quarter after the iPhone 5 launch in September 2012. By contrast, sales of iPhones dropped by two million units in one quarter after the release of the iPhone 4S in October, 2011. Still, cumulative sales of the iPhone 5 in its first two quarters are around 13 million units higher compared to the same period for the iPhone 4S.
Apple also sold 19.5 million iPads during the quarter, compared to 11.8 million in the year-ago quarter. Apple was able to sell significantly more iPad minis in the March quarter than in the December launch quarter and to expand availability to China. iPad experienced very strong year-over-year growth in every operating segment, particularly in Greater China and Japan where sales more than doubled year over year.
According to Apple, its early market research indicates that the overwhelming majority of iPad mini purchasers are first-time iPad customers, which is a good news for the company as it avoids cannibalization of the iPad 9.7” by the smaller model.
The company sold 3.95 million Macs, compared to 4 million in the year-ago quarter. Apple said it experienced strong year-over-year growth in desktop sales following the December quarter launch of the new iMacs, offset by a decline in portable sales given a weaker personal computer market overall.
Keeping in mind that the market of personal computers contracted by 14% year-over-year, according to IDC, Apple’s sales results can be considered more or less positive.
Apple sold 5.6 million iPods compared to 7.7 million in the year ago quarter, which is hardly surprising as many other personal digital media players have already vanished into oblivion. iPod Touch continued to account for over half of all iPods sold during the March quarter.
iPod’s share of U.S. market for MP3 players was over 70% in the March quarter based on the latest data published by NPD; iPod continues to be the top-selling MP3 player in most countries Apple tracks based on the latest data published by GfK.
“Our cash generation remains very strong, with $12.5 billion in cash flow from operations during the quarter and an ending cash balance of $145 billion,” said Peter Oppenheimer, Apple’s CFO.
For its fiscal 2013 third quarter Apple expects revenue between $33.5 billion and $35.5 billion (which is in line or below Q3 FY2012), further gross margin decline to between 36% and 37% and operating expenses between $3.85 billion and $3.95 billion. Given the very conservative outlook for the ongoing quarter, it is unrealistically to expect Apple to make major product launches before June 30, 2013. Even if Apple unleashes certain new products, it will barely ship them in mass quantities before the end of the quarter.