Dear Visitor,

Our system has found that you are using an ad-blocking browser add-on.

We just wanted to let you know that our site content is, of course, available to you absolutely free of charge.

Our ads are the only way we have to be able to bring you the latest high-quality content, which is written by professional journalists, with the help of editors, graphic designers, and our site production and I.T. staff, as well as many other talented people who work around the clock for this site.

So, we ask you to add this site to your Ad Blocker’s "white list" or to simply disable your Ad Blocker while visiting this site.

Continue on this site freely
You are here: Home / Mobile Tech / iPhone 6 Makes Apple Go Ch-Ching
iPhone 6 Makes Apple Go Ch-Ching in 1st Quarter
iPhone 6 Makes Apple Go Ch-Ching in 1st Quarter
By Jennifer LeClaire / CRM Daily Like this on Facebook Tweet this Link thison Linkedin Link this on Google Plus
When former Apple CEO Steve Job died, many predicted the demise of Apple. It looks like the company's detractors will have to wait, because the iPhone-maker just came out with a whopping 38 percent profit increase in its first-quarter earnings.

And that's not the whole story. Apple also reported that highest-ever revenues and earnings drove a 48 percent increase in earnings per share.

Indeed, Apple smashed Wall Street's expectations -- which were already quite bullish -- in its fiscal 2015 first-quarter earnings report, which covers the three months ending Dec. 27, 2014.

"We'd like to thank our customers for an incredible quarter, which saw demand for Apple products soar to an all-time high," said Tim Cook, Apple's CEO. "Our revenue grew 30 percent over last year to $74.6 billion, and the execution by our teams to achieve these results was simply phenomenal."

It's Not All About the iPhone

Apple posted record quarterly revenue of $74.6 billion and record quarterly net profit of $18 billion, or $3.06 per diluted share. These results compare with revenue of $57.6 billion and net profit of $13.1 billion, or $2.07 per diluted share, in the year-ago quarter. Gross margin was 39.9 percent, compared with 37.9 percent in the year-ago quarter. International sales accounted for 65 percent of the quarter's revenue.

What drove the smashing results? All-time record revenue from both iPhone sales with 74.5 million sold -- which is not surprising -- but also all-time record revenue from Mac sales and record performance of the App Store. Call it a triple whammy for Apple.

"Our exceptional results produced EPS growth of 48 percent over last year, and $33.7 billion in operating cash flow during the quarter, an all-time record," said Luca Maestri, Apple's CFO. "We spent over $8 billion on our capital return program, bringing total returns to investors to almost $103 billion, over $57 billion of which occurred in just the last 12 months."

The China Factor

Where does Apple go from here? The company is providing guidance for its 2015 second quarter that estimates revenue from $52 billion to $55 billion and a gross margin in the range of 38.5 percent to 39.5 percent.

That's off from the first quarter but an expected drop-off, given the holiday shopping season and the introduction of the iPhone 6 and iPhone 6 Plus last quarter.

We caught up with Roger Entner, principal analyst at Recon Analytics, to get his take on the earnings and what this means for Apple going forward. He told us the iPhone 6 pushed the majority of the increase.

"The iPhone 6 is the hero and the earnings shows how important that 5-inch screen is, because Apple's growth previously was stunted by the small screen sizes while Samsung profited handsomely," Entner said.

"I was impressed but not terribly surprised by the earnings. We knew that there was pent-up demand for 5-inch-plus devices from Apple. All of the smartphone sales growth before the iPhone 6 was found in either entry-level smartphones ore phones larger than 5 inches."

So where does Apple go from here? Entner said international expansion is where Apple will continue seeing growth. He pointed to the importance of China, which was responsible for a surge in earnings. Apple generated $16.1 billion in revenue in Greater China in the fiscal first quarter, up 70 percent from the same period a year ago. He also noted his latest research, which shows there is a decline in phone sales in the U.S.

Tell Us What You Think


Like Us on FacebookFollow Us on Twitter
© Copyright 2018 NewsFactor Network. All rights reserved. Member of Accuserve Ad Network.