Apple Reports Best Non-Holiday Quarter Ever With $5.99 Billion Profit for Q2 2011

Apple today announced financial results for the first calendar quarter and second fiscal quarter of 2011. For the quarter, Apple posted revenue of $24.67 billion and net quarterly profit of $5.99 billion, or $6.40 per diluted share, compared to revenue of $13.50 billion and net quarterly profit of $3.07 billion, or $3.33 per diluted share, in the year-ago quarter. Gross margin was 41.4 percent, compared to 41.7 percent in the year-ago quarter, and international sales accounted for 59 percent of the quarter's revenue. The numbers represent the best non-holiday quarterly revenue and earnings in Apple history, just missing last quarter's $6 billion profit.

Apple shipped 3.76 million Macintosh computers during the quarter, a unit increase of 28 percent over the year-ago quarter. Quarterly iPhone unit sales reached a record 18.65 million, up 113 percent from the year-ago quarter, and the company also sold 9.02 million iPods during the quarter, representing 17 percent unit decline over the year-ago quarter. Apple also sold 4.69 million iPads during the quarter.

"With quarterly revenue growth of 83 percent and profit growth of 95 percent, we're firing on all cylinders," said Steve Jobs, Apple's CEO. "We will continue to innovate on all fronts throughout the remainder of the year."

Apple's guidance for the third quarter of fiscal 2011 includes expected revenue of $23 billion and earnings per diluted share of $5.03.

Apple will provide live streaming of its Q2 2011 financial results conference call at 2:00 PM Pacific, and MacRumors will update this story with coverage of the conference call highlights.

Updates

- Largest year over year quarterly revenue growth. Fueled by record iPhone sales. Robust demand for iPad. Strong growth in Mac sales.
- Mac. 3.76 million Macs. Pleased with the strong growth, given 3% contraction in PC market overall. Growth fueled by popularity of MacBook Air as well as strong sales of MacBook Pros. Entire MBP family was refreshed in January. Customer response excellent.
- Developer preview of Lion was introduced. Lion features Mission Control, LaunchPad, Full Screen Apps, new Multitouch Gestures.
- Lion scheduled to ship this Summer. Look forward to showing more features at WWDC.
- 9 million iPods. Though lower year over year, still higher than expectations. iPod Touch makes up 50% of the iPods sold.
- iTunes Stores - Best quarter ever. $1.4 billion revenue. Over 100 million books downloaded.
- iPhone. Record 18.6 million. 113% year-over-year growth. Significant increase in capacity, allowing them to increase distribution. Verizon launch in the March quarter.
- iPhone continuing to see strong growth in enterprise market.
- iPad. Thrilled with momentum. 4.69 million iPads. Launch of iPad 2. Still trying to get it into hands of customers. We sold every iPad 2 we made this quarter. Would have liked to end with more in channel inventory.
- Just under 189 million cumulative iOS device sales by end of March quarter.
- More than $2 billion in payments to developers in App Stoer.
- Apple Retail. 10th anniversary on May 19th. Half of the Mac sold to those who never owned a Mac before.
- Launched Personal Setup. Helps customer set up the product in the store. Includes email, contacts, applications and more. Set up over 1 million products.
- 40 new stores in fiscal 2011. Nearly 3/4 will be outside of the U.S. Including 5th store in China.
- Excited about our new product pipeline.

Q&A

Q: Any supply chain disruption from Japan?
A: Incredible tragedy. Apple has a long history/ties to people in Japan, we are very saddened. Regarding our business in Japan. Some revenue impact, but not material in consolidated results. Regarding global supply train, we did not have any supply or cost impact in our fiscal Q2 as a reslut of the tragedy, and do not anticipate any material impact in Q3. We sourced hundreds of items in Japan, ranging from LCDs, optical drives, NAND flash, resin coatings, foil. The earthquake/crisis caused disruption to many of these suppliers. But since the disaster, Apple employees have been working around the clock with suppliers and implemented a number of contingency plans. Our partners have displayed an incredible resilience. There are some supply risks that are beyond the current quarter, but the situation is still uncertain, so it's difficult to predict beyond Q3.

Q: Where the iPad 2 constraints are?
A: The demand on iPad 2 has been staggaring. We are still amazed that we are still heavily backlogged. We're planning on addition more countries through the quarter. We are confident we can produce a very large number of iPads for the quarter.

Q: Price elasticity curve of the iPhone with the $49 3GS?
A: Very popular. did very very well.

Q: How do you think of the maturity of LTE? And Apple's sense of urgency to get products out?
A: I was asked this question when we launched the iPhone with Verizon. The first generation of LTE chipsets forced a lot of design compromises. Some of those we are just not willing to make. We are extremely happy with the iPhone 4 and the iPhone 3GS. And hitting 18.6 million units was something much larger than we thought we could do this quarter. And to 3 more large carriers.

Q: International penetration of Macs?
A: Growth on the Mac has been enormous in Asia. Up 76% in Asia-Pacific. Many multiples of the growth that the region had seen for the market. We are seeing enormous growth for the Mac there. Japan also did well. U.S. had a surprisingly strong quarter. Marketshare is obviously less outside the US in most places than in the US. That speaks very well for the opportunity that the Mac has. 20 quarters in a row where we've outgrown the PC market. The momentum is still there and we're the only guys focused on building innovative products in that space. Several of the international countries are extremely portable focused. I see popularity in both the iMac and portable form factors.

Q: Forces that caused lower gross margins?
A: Higher mix of iPad sales (priced very aggressively). The iPhone channel inventory increased by 1.7 million units. The iPad channel inventory fell, and was below our range. So those were the forces I'd highlight.

Q: How are you seeing different opportunities in the large enterprises with your MacBook given the greater receptiveness to the iPhones and tablets. Is it opening doors to get Macs in?
A: Clearly seems to be creating a halo effort for the Mac. In part why we're seeing growth on the Mac side.

Q: Talk about the CDMA phone and any new markets that you are looking to enter?
A: I don't want to get into specifics, but we are constantly looking at where we should bring on incremental partners. We've brought on 3 this quarter. That's on top of the ones we brought on in December. We are constantly looking and adding where it makes sense.

Q: Any similarities between rise of Android and rise of Windows? How do you maintain growth in the face of that?
A: The comscore data released yesterday reported the iOS platform outreaches the Android in the U.S. We launched the iPad 2, sold every one we make. We are gaining traction in enterprise. Largest App store. We feel very good about where we are, and our future product plans. We continue to believe that iPhone's integrated approach is materially better than Android's fragmented approach. The user appreciates that Apple takes full responsibility for the experience. Few customers want to be a system's integrator.

Q: How closely has Jobs stayed involved during his medical leave?
A: He is still on medical leave, but we do see him on a regular basis. And he continues to be involved in major strategic decisions. I know he wants to be back full time as soon as he can.

Q: Was it a forecasting error on the iPad side?
A: Pleased with the progress that we've made on the manufacturing ramp. Producing more than the original iPad launch. So confident, already expanding countries for iPad sales.

Q: Share views on the one year timeline for iPhone, iPod products?
A: We never comment on unannounced products. So I have nothing to share from that perspective.

Q: Any interest in having iPads subsidized by service providers?
A: It is subsidized in some markets (Japan, some European). But the vast majority using the iPad on 3G is on a pay as you plan. So yes, carriers can do that, but many customers prefer the pay as you go plan.

Q: Samsung lawsuit?
A: We are samsung's largest customer. Samsung is a very valued component supplier for us. We felt the mobile division of Samsung has cross the line and have had to now rely on the courts.

Top Rated Comments

(View all)
Avatar
123 months ago

I enjoyed this post immensely as well. As someone in the chemical/nuclear engineering industry, my clients always gripe and complain about corporate greed when big bad oil makes $10 billion in profit in a quarter, but when Apple does it everyone sings their praises as their money goes right into Steve Jobs's bank account and talks about how great it is that the money they've worked for sits somewhere cross-country in the form of numbers on paper.


"Steve Jobs' bank account" eh? You appear not to know how corporations work.

And if my money is going to line someone's pockets, I'd rather it be someone who returns the favor by making my life more enjoyable rather than someone who will gouge me for a natural resource I need to transport me to the job to earn the money to pay for that natural resource, exploiting every war and rumor of war to charge me ever more for the privilege.
Score: 1 Votes (Like | Disagree)
Avatar
123 months ago

Three years ago: iPhone revenue = 10 % of Apple's revenue
Two years ago: iPhone revenue = 26% of Apple's revenue
Now: iPhone revenue = half of Apple's revenue :eek:


Let's just hope they throw us a macbook every now and then. The didn't drop the word "Computer" in the Apple name for nuthin. :eek:
Score: 1 Votes (Like | Disagree)

Top Stories

Here's How You Can Download iOS 14 and iPadOS 14 Around the World [It's Out]

Wednesday September 16, 2020 2:36 am PDT by
Apple's official public release of iOS 14 and iPadOS 14 dropped on Wednesday, September 16, just a day after the company released the Golden Master to third-party developers. Also set to be made available to the general public for the first time are watchOS 7 and tvOS 14. Getting Started With iOS 14 Video Click image to watch iOS 14 Getting Started While that's left a lot of developers...

When Will the iPhone 12 Launch? Here's What We Know

Wednesday September 16, 2020 6:12 am PDT by
Yesterday's "Time Flies" Apple event saw the release of the Apple Watch Series 6, Apple Watch SE, iPad 8, and iPad Air 4, but no new iPhone models. Rumors before the event strongly alleged that it would not see the unveiling of new iPhones, with many reports pointing to an October launch. The lack of new iPhone models yesterday seems to confirm that the iPhone 12 lineup will not appear...

Apple Releases iOS 14 and iPadOS 14 With Home Screen Redesign, App Library, Compact UI, Translate App, Scribble Support, App Clips, and More

Wednesday September 16, 2020 12:48 pm PDT by
Apple has released iOS 14 and iPadOS 14, the newest operating system updates designed for the iPhone and iPad. As with all of Apple's software updates, iOS 14 and iPadOS 14 can be downloaded for free. iOS 14 is available on the iPhone 6s and later, while iPadOS 14 is available on the iPad Air 2 and later. The updates are available on all eligible devices over-the-air in the Settings app. To ...

Apple Updates AirPods 2 and AirPods Pro Firmware to Version 3A283

Monday September 14, 2020 11:24 am PDT by
Apple today released new 3A283 firmware updates for the second-generation AirPods and the AirPods Pro. The second-generation AirPods are being updated from the 2D15 firmware they were previously running, while the AirPods Pros are being updated from the 2D27 firmware they had installed previously. Apple does not provide details on what's included in refreshed firmware so we don't know what's ...

Spotify Says Apple One Bundle Will Cause 'Irreparable Harm to Developer Community'

Tuesday September 15, 2020 12:26 pm PDT by
Apple today announced Apple One, a series of new subscription bundles that provide access to various Apple services at a combined monthly price. In response, Spotify sent out statements (via Peter Kafka) to the press decrying Apple's anti-competitive behavior and calling on "competition authorities" to stop Apple before it is able to cause "irreparable harm" to developers.Once again, Apple...

iOS 14, iPadOS 14, watchOS 7, and tvOS 14 Will Be Released September 16

Tuesday September 15, 2020 11:06 am PDT by
Apple today announced that iOS 14, iPadOS 14, watchOS 7, and tvOS 14 will be officially released on Wednesday, September 16. Apple has seeded the final Golden Master beta versions of each update to developers in advance. ‌iOS 14‌ and iPadOS 14 introduce dozens of new features, including a redesigned Home Screen that supports widgets on the iPhone and iPad for the first time. For more...

New AirPods Pro Firmware Introduces Spatial Audio Support and Automatic Switching

Monday September 14, 2020 12:22 pm PDT by
The new 3A283 firmware that Apple released for the AirPods Pro today appears to introduce support for Spatial Audio, a new feature coming to the higher-end AirPods with iOS 14. Multiple reports on Twitter and the MacRumors forums indicate that the firmware update adds a "Spatial Audio" option to the Control Center, which can be activated to enable the feature. Note that using Spatial Audio...

Apple Releases Safari 14 for Mac Ahead of macOS Big Sur Launch

Wednesday September 16, 2020 1:40 pm PDT by
macOS Big Sur didn't launch alongside iOS 14, iPadOS 14, tvOS 14, and watchOS 7 today, with the update coming later this fall, but Apple did release the Safari 14 update for macOS Catalina and macOS Mojave users. Safari 14 brings improved performance, customizable start pages, a Privacy Report to see which cross-site trackers are being blocked, and a new tab bar design that provides tab...

Full Transcript of Apple's 'Time Flies' Event With Apple Watch and iPad Updates

Tuesday September 15, 2020 8:46 am PDT by
Apple's virtual "Time Flies" event kicks off today at 10:00 a.m. Pacific Time, with Apple expected to debut new Apple Watch and iPad models, but it appears we may not see the iPhone 12 until next month. While we're not expecting to see new iPhones today, Apple's software updates for its various platforms are likely nearly ready for launch, so we may be hearing more about them today. Check...

Everything Apple Announced at Today's iPad and Apple Watch Event in Just Seven Minutes

Tuesday September 15, 2020 2:19 pm PDT by
Apple today held its annual September event, but this year was a bit different because no new iPhones were announced. The "Time Flies" event focused on the Apple Watch Series 6 and the iPad Air, and saw the debut of a new Apple One services bundle. Subscribe to the MacRumors YouTube channel for more videos. It took Apple an hour to introduce the new devices, but we've recapped the event in...