Apple Reports Q2 Financial Results, Key Takeaways From Today’s Earnings Call

Apple announced earnings today for their fiscal 2014 second quarter, beating estimates for revenue and earnings on strong iPhone sales and Mac sales. Apple sold 43.7 million iPhones beating out estimates of 38.45 million and 4.1 million Macs, topping the expected 4.08 million. It wasn’t all good news, with iPad sales of 16.35 million units, well below forecasts of 19.8 million. In addition, the company announced a 7-for-1 stock split, which would take place on June 2nd. All existing shareholders will get six additional stocks for each stock owned. After the announcement, Apple’s CEO Tim Cook was joined by outgoing CFO Peter Openheimer and his replacement, Luca Mastri. The team discussed the quarter and offered vague, but promising details regarding expectations for the remainder of 2014.

Tim Cook

  • Apple has sold roughly 20 billion Apple TVs.
  • Over 1 billion dollars in content has been purchased from Apple TV. It’s this reason that Tim Cook doesn’t feel comfortable calling it a hobby. As for the future, Apple was “feeling quite good about that business and where it can go,” said Cook.
  • Apple acquired 24 companies in the past 18 months.
  • Microsoft Office for iPad has helped iPad sales.
  • The iPad is responsible for 4x the web traffic of all other tablets, including Android and Windows tablets.
  • Angela Aherendts, the former CEO of Burberry, will join Apple next week.
  • There are over 800 million iTunes accounts, most of which have credit cards attached.
  • Customer satisifaction of iPad Air and iPad mini with retina display owners is at a mind-boggling 98 percent
  • 60 of iPhone 5c customers switched from an Android phone and 62 percent switched from Android to the iPhone 4s.

Usually lacking anything substantial with regards to future product plans, this quote from the press release could be taken to mean updates to existing products or perhaps new product categories.

“We’re eagerly looking forward to introducing more new products and services that only Apple could bring to market.”

During the call, Cook elaborated on why Apple takes its time when it comes to delivering products. He reiterated that being first is not as important as delivering great products. As for when those are coming, the company is “not ready to pull the string on the curtain,” said Cook.

Cook had previously promised new products across 2014. We’re almost half way through the year and Apple’s only real product news was the revival of the fourth generation iPad. Apple is likely to introduce an iPhone 6 later this year, featuring a larger display, that could be available in two sizes. Other product lines including the iPad and Apple TV are due for a refresh. The most intriguing space is wearables, which could see Apple enter a new product category with a sensor-laden Apple Watch. Most, if not all of the new products likely won’t debut anytime soon. The next big thing from Apple will come at WWDC 2014, when they introduce iOS 8.

Source: Apple

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