At Apple’s last earnings call back in October, CEO Tim Cook said “I think it’s going to be an iPad Christmas.” Turns out he was right. Apple on Monday reported first quarter earnings results of $57.6 billion in revenue, net income of $13.1 billion and earnings per share of $14.50.
Here’s how that breaks down into devices sales:
- 51 million iPhones, up from the 47.8 million sold a year ago.
- 26 million iPads, up from 22.9 million a year go.
- 4.8 million Macs, up from the 4.1 sold a year ago.
Revenue was up from the $54.5 billion earned a year ago, but profits were flat from the $13.1 billion and earnings of $13.81 per share in its 2013 first quarter. Gross margin was down at 37.6 percent compared to 38.6 percent last year.
The results were just good enough to surpass Wall Street’s expectations. On average, analysts were expecting earnings per share of $14.09 and revenue of $57.46 billion.
As Cook predicted back in October, this quarter’s results were bolstered by the introduction of two new iPads – the iPad Air and the iPad mini with retina display – which came out with plenty of time on store shelves for the holiday shopping season.
This quarter was also notable for Apple as the company struck a deal to begin selling the iPhone on China Mobile, the largest wireless carrier in the world. Those numbers are not reflected here, however, since the phone didn’t actually go on sale until January 17. Even so, the company managed to sell quarterly-record numbers of iPhone and iPads.
During Apple’s earning’s call following the release of its numbers, CFO Peter Oppenheimer reiterated the importance of China Mobile. “China is an incredibly important market to Apple and iOS devices already account for 57% of all mobile web browsing in China.”
Right now the iPhone is selling in 16 cities in China, with 300 cities expected by the end of the year. Tim Cook added, “We’ve been selling at China Mobile for about a week, and last week was the best week we’ve ever had for activations in China.”
Oppenheimer also said that the addition of the iPhone to wireless carrier NTT Docomo in Japan helped spur additional iPhone sales. New markets proved to be very important in general, as strong iPhone and iPad sales in those markets helped Apple offset issues like decreasing iPod sales and channel inventory increases.
In North America, on the other hand, iPhone sales contracted year over year. Tim Cook chalked this up partly to supply issues. Apple sold more iPhone 5s’ than projected, and it took the majority of the quarter to get the phone into proper supply. He also mentioned a change in North American carrier upgrade policies, which is also expected to have an impact on the next quarter.
Looking ahead, analysts’ second quarter guidance predicts $10.93 per share on revenue of $46.05 billion. Apple’s own guidance is a good deal lower, predicting revenue between $42 and $44 billion, with gross margin between 37 and 38 percent.
Likely due to the lower-than-expected guidance, Apple’s shares fell more than eight percent in after-hours trading, to $505, down around $45.
This post was updated several times as more information became available.