Wednesday, October 30, 2013

Apple’s iPhone sales soar But net profit for the year down to US$37bil on higher costs

Apple’s iPhone sales soar But net profit for the year down to US$37bil on higher costs

SAN FRANCISCO: Apple reported that it raked in billions of dollars as iPhone sales soared to new highs, but that costs of making its coveted devices was squeezing profit.

Apple said that it made a profit of US$7.5bil as iPhone sales sizzled in its recently-ended fourth fiscal quarter.

The US tech giant closed out its fiscal year with a net annual profit of US$37bil, an impressive figure but the first annual decline in earnings in 11 years.

“We’re pleased to report a strong finish to an amazing year with record fourth-quarter revenue, including sales of almost 34 million iPhones,” Apple chief executive Tim Cook said in a statement.

The quarterly profit was down 8.6% from a year earlier, but ahead of most analyst forecasts. It came on revenues of some US$37.5bil in the quarter ending Sept 28, up 4% year-on-year.

California-based Apple reported selling 33.8 million iPhones, setting a new record for sales for a September quarter.

Apple said that iPad sales inched up to 14.1 million in a slight rise from the 14 million sold during the same quarter last year.

The current quarter was expected to be a more telling one for iPads, since Apple last week beefed up the line with a slim iPad Air model and an improved iPad Mini ahead of the prime holiday shopping season.

The new iPads will be sold alongside existing versions starting Nov 1 in more than 40 markets around the world. For the first time, China will be among the countries getting the latest iPad models on launch day.

“I think it’s going to be an iPad Christmas,” Cook said during an earnings conference call.

Apple last week also showed off upgrades to its notebooks and desktop computers along with free software to sweeten the deal.

Apple reported that it sold 4.6 million Macs, compared to 4.9 million in the year-ago quarter.

“We’re 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,” Cook said.

Apple’s board of directors also declared a cash dividend of US$3.05 per share of common stock.

“We generated US$9.9bil in cashflow from operations and returned an additional US$7.8bil in cash to shareholders through dividends and share repurchases during the September quarter, bringing cumulative payments under our capital return programme to US$36bil,” said Apple chief financial officer Peter Oppenheimer.

Apple shares were about a dollar below the market close of US$529.88 in after-market trading that followed release of the earnings figures.

Apple said its gross profit margin was 37% compared to 40% in the year-ago quarter.

Narrowing of Apple’s profit margin was due in part to “a richer mix of iPads with higher cost structure” and some new Mac computer models that also cost more to make, Oppenheimer explained during the earnings call.

And it said the outlook for the current quarter was similar, with a margin expected between 36.5% and 37.5%. — AFP

Publish date:30/10/13

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