MacDailyNews presents live notes from Apple’s Q313 Conference Call

MacDailyNews presents live notes from Apple’s Q313 Conference Call with analysts starting at 5pm EDT/2pm PDT today.

Apple today beat Street on EPS and revenue, posting EPS of $7.47 and revenue of $35.3 billion vs. the analysts’ consensus of $7.32 and $35.01 billion, respectively.

Apple sold 31.2 million iPhones, a record for the June quarter, compared to 26 million in the year-ago quarter.

Apple’s Board of Directors also today declared a cash dividend of $3.05 per share of AAPL common stock payable on August 15, 2013 to shareholders of record as of the close of business on August 12, 2013.

Live notes from Apple’s Q313 Conference Call in reverse chronological order:

• AAPL: $434.22, $15.23 (3.63%) @ 5:58pm EDT

• End of conference call.

• Cook on iOS for the car: Very important, a part of the iOS ecosystem, having something in the automobile is very important and “Apple can do this in a very unique way and better than anyone else.”

• Oppy: During June quarter, Apple concluded first $2 billion program (that began in Dec.) and did second $12 billion buyback for 23.5 million shares bought back – also bought back 9 million shares ($4 billion) in open market during quarter.

• Cook: iPhone 4 selling much more that last year’s entry-level model (3GS) did last year
• Cook: Apple saw significant growth in lower price point iPhone (iPhone 4) sales and the iPhone 5 doing well which allowed company to beat most expectations

• Cook: We start at the product because if you don’t you could wind up creating things that customers don’t want
• Cook: Apple is here to make great products. If we focus on that and do it really well, the financial rewards will follow.

• AAPL $433.00, $14.01 (3.34%) @ 5:44pm EDT

• Cook on Russia. Over 80% of smartphones are sold outside carrier-owned stores. Apple sells through a number of retailers. iPhone activations set a record for Russia last quarter. Apple continuing to look at realtionships; Cook sees opportunities in Russia
• Cook: We’re working on stuff that we’re really proud of; we’ll announce things when we’re ready.

• Cook on emerging markets: “We have more than one tool in the toolbox.” (Won’t talk about a “low cost iPhone.”)
• iPhone 5 continues to be the most popular iPhone available by far
• iPhone 4 attracted an impressive number of first time smartphone buyers

• Cook: I continue to believe that in the arc of time here, China is a huge opportunity for Apple; I don’t get discouraged over a 90-day cycle
• Cook: We will double the number of retail stores in China over the next two years
• Cook: About 500,000 developers in China now, up dramatically YOY
• Cook: China is a huge market for Apple; iPad is “doing remarkably well.”
• Cook: China revenue in Q313 was $4.9 billion, or about 14% of Apple Inc.
• Cook: We are not opposed to trade-in programs – “like the environmental aspect of it.”
• Cook: We have not announced anything regarding Retail Store trade-in programs for iPhone, so anything out there now is rumor

• Cook: In Hong Kong, Apple saw a dramatic downturn, not exactly sure what occurred; down 20% in sell through
• Cook: China iPhone sales was weaker during quarter. Sell through down 4% YOY. Hong Kong was actually down, mainland China up over 5% YOY
• Cook: iPhone up over 400% in India. U.S. up over 50%. iPhone growth accelerated during quarter
• Oppy: iPhone ASP down $27 due to mix (iPhone 4)
• Oppy: Apple hit the high end of their internal gross margin expectations for the quarter

• Cook: iPad web share data shows that iPad accelerated during quarter to 84% share. “If there are other tablets being sold, I don’t know what they’re being used for.” LA Unified schools made a “bold” move to rollout millions of iPad untis to students and teachers
• Cook: 2.4 million unit decline in iPad, 1.9 million due to channel inventory changes, sell through declined by just 3%. YOY was new 3rd-gen iPad – the first with a Retina display – Appel hit within the mid point of the company’s iPad units sales expectations
• Cook: Enterprise share over 60% in both iPhone and iPad – much growth possible as Appel “in very front end” of enterprise transition to smartphones and tablets
• Cook: New products and services in existing categories and new categories will fuel Apple’s growth

• Cook: iPad inventory down over 70-0k units, iPhone inventory down over 600k units. Apple tries to reduce inventory whenever possible
• Inventory up since Apple has more retail stores
• Oppy: Projecting gross margins 36-37%. Exiting fall on tap.

• Apple hard at work on some amazing new products that will be released in the fall and over 2014

• AAPL: $438.00, $19.01 (4.54%) @ 5:19pm EDT

• Apple paid $28 billion in dividends in Q313

• Apple now has $146.6 billion in cash, $106 billion of which was offshore

• 26.9% tax rate for quarter
• $10.1 million avg. revenue per store
• 9 new stores opened in quarter, 27 new stores in fiscal 2013
• 6 new store in five new countries, 408 stores total, 156 outside U.S.
• Apple Retail Stores: $4.1 billion reveneue

• iWork for iCloud beta will debut this fall online – all within a web browser

• 8 trillion iOS app Push Notifications delivered to date
• 900,000 apps in iTunes App Store for iOS devices
• iTunes Store: 800,000 TV shows and 350,000 movies purchased per day

• In Maine, school districts were allowed to choose computer makers. 94% chose Apple Macintosh.
• Ed sales = highest quarterly revenue ever

• Apple’s new Mac Pro will be assembled in the U.S. and available later this year
• Apple pleased with Mac sales of 3.8 million units. Above Apple’s expectations. Mac has gained share in the personal computer market. New MacBook Air models have been popular with customers and reviewers

• Companies around the world are developing, deploying, supporting iPad apps.

• AAPL: $440.41, $21.42 (5.11%) @ 5:06pm EDT

• Apple is providing the following guidance for its fiscal 2013 fourth quarter:
– revenue between $34 billion and $37 billion
– gross margin between 36 percent and 37 percent
– operating expenses between $3.9 billion and $3.95 billion
– other income/(expense) of $200 million
– tax rate of 26.5%

• $7.8 billion in cash flow generated from operations during the quarter
• Cook in earnings release: ““We are really excited about the upcoming releases of iOS 7 and OS X Mavericks, and we are laser-focused and working hard on some amazing new products that we will introduce in the fall and across 2014.”
• Cash dividend: $3.05 per share of AAPL common stock payable on August 15, 2013 to shareholders of record as of the close of business on August 12, 2013

• 3.8 million Mac units sold vs. 4.0 million YOY
• 14.6 million iPad units sold vs. 17 million YOY (newer model – 3rd-gen. iPad – was available during quarter last year)
• 31.2 million iPhone units sold vs. 26 million YOY (11 million units, within Apple’s 4-6 week target, in channel inventory)

• Gross margin 36.9 percent vs. 42.8 percent YOY
• quarterly net profit of $6.9 billion, or $7.47 per diluted share vs. net profit of $8.8 billion, or $9.32 per diluted share YOY
• quarterly revenue of $35.3 billion vs. $35 billion YOY
• Apple’s fiscal 2013 third quarter ended June 29, 2013

• AAPL: $440.93, $21.94 (5.24%) @ 4:56pm EDT

Related article:
Apple beats Street on record quarterly iPhone sales – July 23, 2013


  1. Don’t you love how the frigtards at analyst firms like NPD, iSuppli and IDC, along with Wall $treet analysts fall all over themselves to predict who many widgets Apple sold right before the company issues its quarterly earnings? Of course, the analysts are NEVER wrong. Sorry, NPD. As usual, you laid an egg. They all fell short of projections, which of course dented Apple’s stock prices during regular trading today.

    Which begs the question: why do these ivory tower idiots even have jobs? Why aren’t they working at McDonald’s where they belong? Joe Analyst can’t add, much less project. So why bother trying? If you can’t be accurate, you’re either incompetent or acting at the behest of your patrician sponsors (hedge funds, Steve Ballmer, Samsung). That they even get quoted (I’m flipping the bird at you, Enderle) or sought out as experts is ludicrous.

    If you needed proof of how absurd the world can be, dwell on my words.

  2. Great iPhone sales.

    Lower iPad and Mac sales are concerning. As any accountant will tell you, inventory adjustments mean unexpected lower sales demand.

    Apple under Tim Cook has gotten the Mac a little bit overpriced. iMac’s and Macbook Pro’s would sell far better with a $250 lower price tag.

    I have seen numerous potential customers leave that intended to purchase because of price alone.

    This is important, because the initial purchase brings a new customer to the Apple echosystem – AppStore, iTunes, iBooks etc.

    Potential customers are walking away and deciding to keep their old PCs. They can’t stand Windows 8, but they won’t pay the current prices for Macs. Therefore, they do nothing or they replace the hard drive on their old dinosaur.

    Most customers don’t appear to be replacing their old dinosaurs with iPads. Instead they are keeping the old dinosaur and purchasing an iPad.

    If Mac were about $250 less Apple would be selling twice as many Macs. Customers would be replacing the old dinosaur and moving away from Microsoft. As it stands now, Apple is leaving the door open for Microsoft to fix their issues.

  3. The reason why HK has had such a downturn is Samsung with big screens, most people here don’t care what OS they use as long as it has a big screen, it’s a shame as almost everyone had an iPhone at one stage. I personally wouldn’t give up my iPhone 5 for some inferior plastic crap from Samsung but obviously here in HK they have.

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