Sales of Apple Improve Thanks to Strong Shipments of iPad, iPhone, But Profitability Drops

Appleā€™s Revenue Increase, But Profitability Decreases

by Anton Shilov
10/29/2013 | 08:22 PM

Apple has announced financial results for its fiscal 2013 fourth quarter ended September 28, 2013. The company sold more iPad, iPhone and Macintosh products than it did during the same period last year, but at the same time its profitability decreased. Still, strong shipments of key devices in the period that preceded the launch of next-generation products indicate that demand for Apple gadgets is strong.


Apple posted quarterly revenue of $37.5 billion and quarterly net profit of $7.5 billion, or $8.26 per diluted share. These results compare to revenue of $36 billion and net profit of $8.2 billion, or $8.67 per diluted share, in the year-ago quarter. Gross margin was 37% compared to 40% in the year-ago quarter. International sales accounted for 60% of the quarter’s revenue.

“We are pleased to report a strong finish to an amazing year with record fourth quarter revenue, including sales of almost 34 million iPhones. We are excited to go into the holidays with our new iPhone 5c and iPhone 5s, iOS 7, the new iPad mini with retina display and the incredibly thin and light iPad Air, new MacBook Pros, the radical new Mac Pro, OS X Mavericks and the next generation iWork and iLife apps for OS X and iOS,” said Tim Cook, chief executive officer of Apple.


Apple sold 33.8 million iPhones, a record for the fourth quarter of its fiscal year, compared to 26.9 million in the year-ago quarter, an increase of 6.9 million or 26%. It is noteworthy that shipments of iPhones for the Q4 FY2014 include over a week of iPhone 5s and iPhone 5c sales. According to Apple, thanks to expanded geography first-weekend sales of new iPhones were around 9 million. By contrast, shipments of the original iPhone 5 were 5 million in the first weekend, which was included into the company’s Q4 FY2012 results.

The company claims that despite of growing competition, sales of Apple smartphones remain very robust in the U.S. At the same time, Apple was happy to sign new deals with resellers in emerging markets, particularly in Latin America, the Middle East, Russia and India, where are hundreds of millions of potential new buyers.


The company also sold 14.1 million iPads during the quarter, compared to 14 million in the year-ago quarter, a surprise given the fact that rumours about new-generation iPads started to spread well before their formal introduction in October. iPad sales exceeded Apple’s own expectations in the September quarter.

Apple experienced robust year-over-year sales growth in Japan, Russia, the Middle East and strong back-to-school demand for iPad in the U.S. and Canada.


Apple sold 4.6 million Macs, compared to 4.9 million in the year-ago quarter, a 7% decline from the year-ago quarter. Given that shipments of Microsoft Windows-based PCs declined during the same period by around 10%, Apple believes that Macintosh systems are gaining market share.

During the quarter, Apple only introduced new MacBook Air laptops based on Intel Core i-series “Haswell” microprocessors, which naturally were main sales drivers for the whole lineup. This quarter Apple will add new MacBook Pro laptops, Mac Pro high-end desktops as well as new iMac all-in-one sytems.


Sales of iPod personal digital media players dropped to a new low of 3.498 million for the first time since Q1 FY2005. Shipments of iPod dropped by around 24% quarter-over-quarter as well as whopping 34% year-over-year.

Dividends and Predictions

Apple’s board of directors has declared a cash dividend of $3.05 per share of the company’s common stock. The dividend is payable on November 14, 2013, to shareholders of record as of the close of business on November 11, 2013.

“We generated $9.9 billion in cash flow from operations and returned an additional $7.8 billion in cash to shareholders through dividends and share repurchases during the September quarter, bringing cumulative payments under our capital return program to $36 billion,” said Peter Oppenheimer, Apple’s CFO.

For the first quarter of fiscal 2014 Apple expects revenue between $55 billion and $58 billion, gross margin between 36.5% and 37.5%, operating expenses between $4.4 billion and $4.5 billion and other income/(expense) of $200 million.