Apple Q4 earnings: A very strong quarter boosted by 39 million iPhones sold

The past quarter saw Apple launch the latest version of its most profitable product, the iPhone, as well as introduce its vision of wearable computing in the Apple Watch. Apple also had a very good quarter financially. On Monday, the company reported fiscal fourth-quarter revenue of $42.1 billion and net income of $8.5 billion, which works out to $1.42 per share.

The results beat expectations from analysts, who were expecting revenue just under $40 billion, which works out to $1.30 per share. [company]Apple[/company] provided its own guidance for fourth-quarter revenue between $37 billion and $40 billion.

The results are Apple’s highest per-share quarterly earnings in the company’s history. Revenue and net income are up nearly 11 percent revenue year over year.

Here are the device sales numbers:

  • 39.27 million iPhones shipped, versus 33.8 million last year.
  • 12.3 million iPads shipped, versus 14.1 million last year.
  • 5.5 million Macs shipped, compared to 4.6 million last year.

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The strong iPhone sales numbers are an indication that the iPhone 6 and the iPhone 6 Plus are a hit, although only a few weeks of sales from the September 19th launch date factor into these results. In the previous quarter ending in July, Apple sold 35 million iPhones. Apple announced that it took over 10 million pre-orders for the iPhone 6, so it’s not surprising to see that number rise.

CEO Tim Cook couldn’t offer more information about mix of iPhone 6 versus iPhone 6 Plus sales. “We’re selling everything we’re making,” Cook said.

Those numbers could have been even higher: Apple didn’t launch the latest iPhone in China — one of its key markets — until October 17, and international sales still counted towards 60 percent of revenue. “I see the first-time iPhone buyer being a huge opportunity,” Cook said. “As well as upgraders. Many of those first-time buyers are switching from Android.”

Eighty percent of iPhones in China are sold without a carrier subsidy.

“iPhone sales grew in both developed and emerging markets,” CFO Luca Maestri said.

iPads sales were again down year over year, which is now part of a full blown trend. Apple released new iPad models towards the end of the quarter, so it will be interesting to see whether there’s a holiday season bump for Apple’s tablet. However, Mac sales were up nearly 17 percent year over year, which is the most Macs that Apple has ever sold in a single quarter.

“iPad sales were consistent with our expectations,“ Maestri said. “With particularly strong demand in Japan, where iPad sales were up 46 percent.”

“Looking further, there’s a popular view that the market is saturated, but we don’t see that,” Cook said. “People hold on to an iPad longer than they do a phone. We still don’t know what the iPad upgrade cycle will be for most people.”

Part of the increase in Mac sales was driven by back-to-school sales. Apple also reported it saw demand in emerging markets up 46 percent.

Apple’s gross margin, an important number to watch, fell after several quarters in which it had been rising. Gross margin was 38 percent, which is lower than last quarter’s 39.4 percent but higher than 37 percent in the year ago quarter.

Apple ended the quarter with $155 billion in cash and securities on hand, which is a decline of $9.3 billion from the past quarter, thanks to an aggressive share buyback program. The board also declared a cash dividend of $.47 per share.

Cook said that Apple had completed 20 acquisitions over the past year, including seven in the most recent quarter.

Apple doesn’t see its string of impressive quarters ending next quarter, which contains the lucrative holiday shopping season in the United States and Europe. The company provided guidance that indicated it expects to see between $63.5 and $66 billion in revenue.

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This post was updated several times Monday afternoon as more information became available.