Few Financial Records, But Stores Remain Strong

It was a financial quarter with just one unqualified record for Apple Inc., but both the company and its 372 retail stores continued to generate strong revenues and profits. The company reported that sales of 17 million iPads was a record for any quarter, and that iPhone and Mac sales hit new records for the June quarter. Sales of iPads into the education market was particularly strong, the company noted, with one Texas school district buying 11,000 iPads . Overall, Apple posted revenues of $35.0 billion for Q3 2012, and generated a profit of $8.8 billion, both increases from the year-ago quarter. The retail stores reported revenues of $4.1 billion and a profit of $868 million, again, increases from the year-ago quarter. During a conference call with financial analysts, CEO Tim Cook said the retail store results reflected strong iPhone and iPad sales. The stores sold a respectable 791,000 Macs during the quarter, but it was the third-lowest figure over the last eight quarters. As usual, “about half” of the Macs were sold to first-time Mac buyers, Cook said. Store visitors totaled 83 million, an increase year-to-year, but down from the previous two quarters. Review the full charts and graphs of the quarter’s financial results.

Cook said that Asia-Pacific total sales (two-thirds composed of greater China) were up 25 percent. However, the specific China component of sales was down sequentially from $7.9 billion in Q2 to $5.7 billion in Q3. He attributed the decline to changes in the channel inventory and seasonality.

On a region basis, Cook described U.S. iPhone sales as “very strong”  at 47 percent growth, while Japan up 45 percent, greater China up 66 percent, and mainland China up over 100 percent. “The geography that did not perform well was Europe,” Cook said. “Europe was essentially flat, slightly positive year-on-year and that really hampered our total results.”

In response to a question about why hasn’t Apple been more successful in India, Cook replied, “You know of course I love India.” But he quickly added that, “Apple has some higher potential in the intermediate term in some other countries.”

Cook explained Apple is “putting emphasis” on India. “We have a business there, that business is growing, but the sort of the multi-layer distribution there really adds to the cost of getting products to market. And so, we’re going to continue putting some energies there, but my own perspective is that, in the intermediate term, there will be larger opportunities outside of there.”

Interestingly, an analyst asked about the on-going speculation about future products and how that might impact Apple’s quarterly financial results. Cook was philosophical about it. “I’m glad that people want the next thing. I’m super happy about it,” he said. “And so, I’m not going to put any energy into try to get people to stop speculating. I don’t think it would – I don’t think that’s going to amount to anything.”